A good landlord broker does much more than put up a sign. Here is what to expect when you hire one to lease an industrial building in Kern County, how the broker gets paid and what belongs in the listing agreement.
A landlord broker, also called a listing broker or agency leasing broker, represents the owner of a commercial building in leasing it. The broker sets pricing from comparable deals, markets the property, screens tenants and negotiates the letter of intent and lease. In California the broker owes the owner fiduciary duties, and the owner usually pays the commission.
Key takeaways
- A landlord broker works for the owner and owes the owner a fiduciary duty of utmost care, integrity, honesty and loyalty under California agency law.
- The most valuable work happens before marketing starts: pricing from real comparable deals, a property audit and a clear lease structure.
- Compare offers on net effective rent and tenant credit, not on the face rate alone.
- Read the listing agreement for its term, the events that earn a commission, the protection period after expiration and any advance consent to dual agency.
What is a landlord broker?
A landlord broker represents the owner of a commercial property in finding a tenant and negotiating the lease. You will also hear the terms listing broker, agency leasing broker or landlord rep. Large regional brokerage firms list landlord and seller representation as a core industrial service alongside tenant and buyer representation.
California agency law treats a landlord as a seller and a tenant as a buyer for leases longer than one year. Under Civil Code Section 2079.13, the term “seller” includes a lessor and “buyer” includes a lessee. The owner’s broker therefore owes the owner a fiduciary duty while still dealing honestly with the tenant and disclosing known material facts. Section 2079.14 calls for a written agency disclosure before the listing agreement is signed.
How does a landlord broker compare with a tenant rep broker?
The two brokers sit on opposite sides of the same lease. Our guide to the tenant rep broker covers the other side in detail.
| Landlord (listing) broker | Tenant rep broker | |
|---|---|---|
| Represents | The property owner | The business leasing space |
| Main goal | Lease the building on the best achievable terms to a creditworthy tenant | Find the right space on the best achievable terms for the tenant |
| Core tasks | Pricing, property prep, marketing, tenant screening, lease negotiation | Needs analysis, market search, tours, negotiation across several buildings |
| Usually paid by | The owner, under the listing agreement | Usually the owner, through a share of the listing commission |
What does a landlord broker do before marketing starts?
The groundwork done before a sign goes up often decides how fast a building leases. For a 40,000 SF warehouse in Bakersfield, expect the broker to cover these items:
- Pricing: an asking rent and lease structure built on recent comparable deals, not only on competing asking rates.
- Property audit: clear height, power, dock-high and grade-level doors, truck court depth, sprinklers, yard, office percentage and parking. Our guide to industrial building specs explains which numbers matter.
- Zoning and use: which uses the zoning allows, so marketing targets tenants who can operate there.
- Readiness: fixes that widen the tenant pool, such as dock equipment repairs, lighting or deferred maintenance.
- Lease structure: triple net (NNN) or modified gross, preferred term, annual escalations and the tenant improvement budget the owner will consider.
- Documents: existing leases, title documents, plans and utility information. AIR CRE’s owner listing form asks the owner for a property information sheet within five business days, in the 2017 version posted on its site.
What California item do owners often miss?
Civil Code Section 1938 requires a commercial lessor to state on every lease whether a Certified Access Specialist (CASp) has inspected the premises. If not, the lease must carry specific statutory language. A broker typically settles the building’s CASp status early so the lease form is right.
How does a landlord broker market an industrial building?
Marketing should reach tenants searching today and those who do not yet know they will move. A typical plan includes:
- Signage and a marketing package with specs, a site plan, photos and aerials.
- Listings on commercial listing platforms and information exchanges.
- Direct outreach to tenant rep brokers, who are usually offered a share of the commission for bringing a tenant.
- Canvassing of local users, such as companies in older nearby buildings or businesses known to be growing.
- Tours, with feedback gathered on price, condition and layout.
- Regular written reports to the owner on inquiries, tours, proposals and any pricing changes the market is signaling.
How does a landlord broker screen tenants and negotiate the lease?
An offer is more than a rent number. A good landlord broker weighs each proposal on several fronts and translates it into what the owner actually nets over the term.
- Economics: base rent, escalations, free rent and tenant improvements, compared on a net effective rent basis.
- Credit: financial statements, time in business, security deposit, and whether a personal or corporate guarantee is appropriate.
- Use: high-piled storage, hazardous materials, power needs and truck traffic, all of which affect permits, insurance and building wear.
- Expense structure: which operating costs pass through, any caps the tenant requests and how reconciliations will work.
From letter of intent to signed lease
Once the parties agree on terms in a letter of intent, the broker coordinates the lease draft with the owner’s attorney and the tenant’s team. In California the draft is usually on an AIR CRE form. The broker keeps the deal on schedule through signing.
What are the small-business tenant rules?
California’s SB 1103 added protections for qualified commercial tenants. The category covers microenterprises, restaurants with fewer than 10 employees and nonprofits with fewer than 20 employees. For leases signed or renewed on or after Jan. 1, 2025, operating costs charged to these tenants must be allocated proportionately and backed by supporting documents. See Civil Code Section 1950.9 and our SB 1103 explainer. Most industrial tenants will not qualify, but a small shop or flex tenant might.
What happens after the lease is signed?
The broker’s job continues through delivery. That can include coordinating tenant improvement work and the delivery condition, confirming the commencement date and making sure the commission and any cooperating broker share are paid as agreed.
A landlord broker is not a property manager. Rent collection, maintenance and year-end expense reconciliations belong to the owner or a management firm, unless you hire the broker’s firm separately for that work.
How is a landlord broker paid?
The owner pays the commission under the listing agreement. On a lease, it is usually a percentage of the rent over the lease term. When the tenant has its own broker, the listing broker shares the commission with that broker. One 2020 brokerage industry guide describes a common pattern of paying half at lease signing and half when the tenant takes occupancy.
Commissions are not fixed by law, and the owner and broker negotiate them. Our article on how commercial real estate commissions work walks through the math.
What should an owner check in a listing agreement?
Start with the writing requirements, then read the clauses that decide when you owe a commission. California requires an agreement employing a broker to lease real estate for more than one year to be in writing, under Civil Code Section 1624. A broker also cannot collect a commission under an exclusive agreement that lacks a definite termination date, per Business and Professions Code Section 10176.
AIR CRE’s Exclusive Right to Represent Owner form (OA-8.10, revised Nov. 1, 2017) shows the points worth reading closely:
- Referral of inquiries: the owner agrees to send every inquiry to the broker during the term.
- When the commission is earned: a lease or sale during the term and, in some cases, if the owner withdraws the property.
- Protection period: a commission can still be owed if the owner deals with a registered prospect within 180 days after expiration.
- Dual agency consent: the owner consents in advance to the broker representing a tenant the broker finds. See our guide to dual agency in California commercial real estate.
- Cooperating brokers: how the commission is shared with a tenant’s broker.
What if you already have a tenant in mind?
AIR CRE also publishes a limited listing agreement (OLA-4.00) for a sale or lease to specific named prospects. It can fit better than a full exclusive listing. An attorney can review whichever form an owner uses.
Why does pricing right matter on a 40,000 SF Bakersfield warehouse?
Overpricing a building can cost more in vacancy than the higher rent ever earns back. This is a hypothetical illustration, not a quote of current market rent. Assume comparable deals support $0.70 per SF per month NNN, or $28,000 a month. Assume the owner also carries about $0.12 per SF per month in taxes, insurance and common costs while the building sits empty, or $4,800 a month.
The owner wants to ask $0.75 instead. Suppose the higher price adds four months of vacancy. The table shows the result. It assumes a tenant eventually pays the higher rate and ignores escalations and the time value of money to keep the math simple.
| Hypothetical cost of overpricing by $0.05 per SF | Amount |
|---|---|
| Lost rent during 4 extra vacant months (4 x $28,000) | $112,000 |
| Carrying costs during those months (4 x $4,800) | $19,200 |
| Total cost of the extra vacancy | $131,200 |
| Extra rent from the higher price over 60 months (40,000 SF x $0.05 x 60) | $120,000 |
| Net result of overpricing | $11,200 worse |
Frequently asked questions
Who pays the landlord broker?
The property owner pays under the listing agreement. On a lease, the commission is usually a percentage of the rent over the term, and the listing broker splits it with the tenant’s broker if the tenant has one. Both the amount and the payment timing are negotiable and belong in writing before marketing begins.
Do I need a landlord broker if I already have a tenant lined up?
Not necessarily a full exclusive listing. AIR CRE publishes a limited listing agreement under which the broker earns a fee only if you sign with named prospects. A broker can still help by checking the tenant’s credit, negotiating the letter of intent and lease terms and handling California requirements such as the CASp statement.
Can my listing broker also represent the tenant?
Yes, but only with the knowledge and consent of both parties. California calls this dual agency. The broker then cannot share either side’s confidential bargaining information, such as the lowest rent you would accept. Many listing agreements, including AIR CRE’s owner form, include advance consent to dual agency, so that clause deserves a close read before signing.
What is a protection period in a listing agreement?
It is a window after the listing expires in which the broker can still earn a commission if you lease or sell to a prospect the broker introduced. AIR CRE’s 2017 owner form sets it at 180 days for registered prospects. A written list of registered prospects helps avoid disputes later.
Is a landlord broker the same as a property manager?
No. A landlord broker leases the building and negotiates the deal. A property manager collects rent, handles maintenance and vendors and prepares operating expense reconciliations. Some firms offer both, but the engagements and fees are separate.
What does a landlord broker need from me to get started?
Expect to supply a property information sheet, copies of existing leases, title documents, building plans, utility details and your CASp inspection status. AIR CRE’s owner form sets a five-business-day window for the information sheet. Tell your broker about any known defects, because California owners have disclosure obligations.
How often should my landlord broker report to me?
Set a schedule in writing when you sign the listing. A useful report covers inquiries, tours, tenant feedback, proposals, competing buildings and pricing signals from the market. Monthly is a reasonable minimum, with faster updates when a proposal is active.
If you own an industrial building in Bakersfield or elsewhere in Kern County and want a clear-eyed pricing and marketing plan before you list, call Kern CRE at 855-KERN-CRE (855-537-6273) or contact us. Get Kern County CRE news monthly: subscribe to the Kern CRE report.
Sources
- Industrial Services, Kidder Mathews.
- Civil Code Section 2079.13 (definitions; seller includes lessor, buyer includes lessee, leaseholds over one year), California Legislative Information.
- Civil Code Section 2079.14 (seller’s agent provides disclosure before listing agreement), California Legislative Information.
- Disclosure Regarding Real Estate Agency Relationship (Form AD-2.01, revised July 28, 2017), AIR CRE, July 2017.
- Exclusive Right to Represent Owner for Sale or Lease of Real Property (Form OA-8.10, revised Nov. 1, 2017), AIR CRE, November 2017.
- Limited Listing Agreement for Sale or Lease of Real Property (Form OLA-4.00, revised Jan. 3, 2017), AIR CRE, January 2017.
- List of Contracts, AIR CRE.
- Civil Code Section 1938 (CASp inspection statement in commercial leases), California Legislative Information.
- Civil Code Section 1950.9 (qualified commercial tenants; building operating costs), California Legislative Information.
- SB 1103 (2023-2024): Tenancy of commercial real properties: agreements: building operating costs, California Legislative Information, Chapter 1015, Statutes of 2024.
- How Does a Commercial Broker Get Paid?, Voit Real Estate Services, August 2020.
- Civil Code Section 1624 (statute of frauds, broker agreements), California Legislative Information.
- Business and Professions Code Section 10176 (exclusive agreements need a definite termination date; acting for more than one party), California Legislative Information.
About this article
Kern CRE prepared this article with help from AI research and writing tools. An editor reviewed the draft, checked its facts against the sources linked above and edited it for accuracy and clarity. It is general information, not legal, tax, investment or financial advice; talk with a qualified professional about your situation.