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How to Leverage Otso

Since we’re getting these questions a lot (which is great!) from prospective landlords, brokers and tenants alike we thought it would be helpful to break down how each group is leveraging the Otso Guarantee program most successfully.

This guide will cover the basics and some real-world examples of how Otso is best applied to commercial real estate leasing. You can scroll down to skip to the most relevant sections for you below.

Landlords

Landlord Leasing Teams

Businesses and Tenants

Tenant Representatives

As a refresher here is how we describe ourselves here at Otso:

Otso writes AA-rated guarantees on behalf of Tenants to provide an alternative to cash deposits. Otso is an option and does not preclude Landlords from using cash, LOC’s or any other form of collateral securitization on any deal, the choice always lies with the Landlord and Tenant.

Landlords

We’ll start with Landlords since they’re the ultimate owner of the commercial property and beneficiary if there is ever an issue or a claim needed to be made on a guarantee.

Why would a Landlord use Otso?

Landlords typically sign up for our program for one (or all) of these reasons:

Otso is 100% free for Landlords to join and offer and always an option (not required)

  • Increase coverages against default instances (as defined by their leases) by 3-400% on every deal.
  • Marketing and negotiation advantages from not requiring deposits from prospective or current tenants
  • Exclusive financial reports (at no costs) from applicants including business banking history.

Bottomline? We help you facilitate more deals with more rent and less risk. Sign up is free and offering Otso creates no obligation on either Landlord or Tenant.

How About a Real-world example of how a Landlord uses Otso?

Here is a typical start-finish flow for a Landlord customer:

  • Reviews, approves and signs program agreement and joins Otso for Free
  • Receives secure application link for their building
  • Leasing team receives access to dashboard to introduce program to prospects
  • Building is now marketing “deposit-free” by leasing team
  • Prospect tours a vacancy and asks for a proposal, let’s say rent is $5,000 per month (gross)
  • Leasing team shares link and prospect applies for $15,000 (3 months rent)
  • Landlord and Team receive financial report/application
  • Prospect is approved, Guarantee fee is quoted to LL of $125/month
  • Landlord and Leasing Team provide proposal to Tenant with Otso as an option like this:

Option A: Tenant puts up a $15,000 security deposit.

Option B: Tenant deposit not required, base rent increases by $125/month/

  • Landlord/Leasing Team and Tenant negotiate a rate inclusive of the Guarantee Fee.
  • Terms are agreed and lease is drafted
  • Leasing Team logs into Otso Dashboard and clicks “Sign Guarantee”
  • A guarantee document is generated with tenant, landlord and guarantee amount included
  • Distributed for signature automatically via docusign
  • Landlord and Tenant sign lease and guarantee, Otso executes guarantee
  • Leasing Team uploads lease as proof of execution via Otso Admin
  • Guarantee is live and good for $15,000 for the life of the lease.
  • Landlord is billed the setup fee (one-time) and the guarantee fee (recurring)

As a Landlord, how do I claim if there is an issue?

At any point in the lease if a default situation arises as defined by your lease agreement you can make a claim by simple uploading required documentation to our secure portal. We verify and issue a payment within thirty (30) days of receiving and then seek restitution from the Tenant directly. 

Landlord Helpful Links

Top Questions

Review Guarantee Sample

Leasing Teams and Landlord Representatives

This section is primarily geared towards Brokers, specifically ones working on behalf of Landlords to successfully lease their projects. The previous section on Landlords will also be helpful to you, in understanding how your clients can benefit and leverage the program.

As a Broker, Why Would I Recommend Otso to my Landlord Clients?

Brokers are usually the front-lines of every lease transaction, we interact with brokers far more than Landlords since they are usually trusted confidants and are responsible for ensuring their clients goals are achieved.  In the spirit of that, Brokers typically recommend us to their clients because:

  • Using deposit-free gives them an advantage over competitors in both marketing and advertising in their efforts to lease the building.
  • Not requiring a deposit is a big advantage in negotiating a deal, especially in the current cash-strapped environment for businesses.
  • Facilitating a transaction with Otso provides their clients with more coverage against default than cash does.
  • Otso also incentivizes early renewals by allowing Landlords to return deposits early to existing tenants.

Bottomline? Otso helps brokers lease assets faster and with less risk for their clients.

There is zero software to learn, offering Otso is as simple as your client signing up and us generating you the secure link for Tenants to apply.

How do Brokers introduce Otso to their Clients?

We’re happy to hop on an introductory call but our first inflection point is typically around these resources:

Landlord Presentation

Landlord Landing Pages

Top Questions

These cover the majority of the program and then we can dive into some specific answers to questions you and your clients may have on a call.

Do Brokers Benefit or Share Revenue from using Otso?

Yes! Every guarantee facilitated by a procuring broker earns 10% revenue share on an annual basis, for the life of the guarantee. Over time, this can add up! Visit this page to learn more.

For Business and Tenants

As a business, commercial real estate and the decision to lease is a massive inflection point. For offices, it’s an opportunity to work together, secure information and collaborate as teams. While in retail and industrial it’s an essential piece of the business model for companies selling, building or distributing products. Regardless of the many prognostications on the “death” of occupying physical space fear not, we believe companies will continue to see the value of leasing spaces as a business (becoming tenants) for many years to come.

Factors like location, amenities, size and COSTS typically dictate how and where a business will ultimately sign a lease. At Otso, our role in the process is three-fold for prospective and current tenants:

  1. Our industry-first pre-approval program can give your business the understanding and financial strength needed to present a strong offer to prospective landlords.
  2. Our application is a great “gut check” on what you can safely afford in the near-term for your business, helping you make a good decision.
  3. With approval, the biggest benefit is in being able to keep your cash and invest it into your business instead of locking it up for years to come in a non-interest bearing deposit.

This Presentation is Helpful for Tenants

Example of How a Business Leverages Otso

Here’s what we recommend, this can be done well in advance of signing a lease:

  • Go to this link and apply for the equivalent of three (3) months rent (whatever your budget is)
  • Applications cost nothing and require no personal credit information or uploading of financials
  • Most approvals happen the very same day, up to $50,000
  • If you think you need more, just contact us. We can approve up to $500,000 manually in 4-7 days.
  • Once approved you will receive both a handy financial report (with banking history) to present to Landlords
  • In addition you will also receive our pre-approval letter for whatever the amount you applied for
  • These are good for ninety (90) days from approval
  • You can share these with your tenant representative or other interested parties
  • When seeking space (with or without a rep, hopefully with!) you can present both your financial report and our pre-approval letter to the Landlord
  • Immediately this Landlord will know you have a good financial standing along with a third party willing to back your performance for multiple months of rent
  • The costs of the guarantee are worked into your base rent
  • When you’re ready to sign a lease, the LL will simply add our guarantee as an exhibit that you, they and we all sign!
  • That’s it! No liabilities exist on your books unless there is a default that occurs.

How do Tenant Representatives Leverage Otso for Their Clients?

Tenant representatives are an essential cog to the leasing process. In fact, we regularly recommend reps to businesses who leverage our pre-approval if they do not have one. Using Otso provides a few key benefits for Brokerage Professionals:

  • Applying is free and requires no personal credit information
  • Your clients will receive a handy financial report (with banking history) along with our approval letter if we approve them
  • Similar to a strong offer when seeking a home, our letter and report serves to strengthen your offer and reduce any financial collection in a prospective lease negotiation
  • Guarantees are good for the life of the lease and cover every instance of default in the lease itself
  • Since the costs are “baked” into the base rent, oftentimes businesses feel the nominal fees are negotiated out anyway
  • When a lease ends there is nothing for your client to do, seek or ask for. No messing around trying to get a cash deposit back 
  • Our guarantees are 100% optional, even with approval no obligation is created for Tenant or Landlord it is always your clients choice.
  • Brokers share in our fees! You will receive a portion of the net guarantee value every year it is active.

Learn More about how Brokers can Benefit from Otso here.

How do I get my Client Started?

It’s simple, just send them this link.

If you have any questions or comments our team is ready and willing to hop on a call or discuss our program in-depth with you and your clients.

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We're the team at Otso! We're dedicated to making commercial real estate leases better for everyone by reducing risk and enhancing capital flexibility.

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