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Discussion of tenant representative commission rates and potential earnings
1:28:38
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Council Member Restler and Commissioner Molina discuss the commission rates for tenant representatives and the potential earnings from large lease agreements. The discussion highlights the significant financial implications of these contracts.
- Molina explains that commissions are paid by landlords, not the city, and are capped at 5% for leasing and 4-6% for acquisitions
- Restler provides an example of a recent lease agreement that could result in over $6 million in commissions over 5 years
- The potential commission for the proposed purchase of the Bronx Logistics Center is discussed, which could be as high as $13.4 million
Louis Molina
1:28:38
So in within our tenant first of all, the the commissions are paid by the landlords, they're not paid by the city.
1:28:45
And what we indicate in our contract with our tenant representatives is we cap what those commission rates can be.
1:28:52
And on leasing, it's 5%.
1:28:54
And that percentage may change over the term of the lease because it's determined by the term of the lease.
1:29:00
Obviously, the dollar value of the lease.
1:29:02
So every year might be a little bit different.
1:29:05
And on an acquisition, I believe the cap is anywhere of a range between 4% 6%.
Lincoln Restler
1:29:10
Okay.
1:29:11
So just to give examples, ACS recently signed a lease for 110, William, 630,000 square feet, costing $28,800,000 in year 1, 30 point $7,000,000 in subsequent years.
1:29:25
So that works out to $1,400,000 for the tenant rep in year 1 and over $6,000,000 in the 1st 5 years of the deal.
1:29:33
Is that consistent with your understanding?
Louis Molina
1:29:37
I can get back to you to give you a more substantive answer on exactly what the commission would be for that particular location.
1:29:43
But that that deal was negotiated by Mister Gigglio.
Lincoln Restler
1:29:46
Understood.
1:29:48
Thought it was a CPR regale.
1:29:50
But either way, the oh, no.
1:29:51
You're right, Mister Gilio.
1:29:52
Excuse me.
1:29:53
Just trying to get a sense of the scale of the amount of money that goes to these tenant reps on these contracts.
1:29:57
$6,000,000 over 5 years is a lot of money.
1:30:02
For one license agreement.
1:30:05
And you mentioned on a purchase of a city building, we're gonna talk a little bit more in a couple minutes about the Bronx Logistics Center.
1:30:11
Deputy Commissioner Hamilton has been trying to get the city to purchase this building for some time now.
1:30:18
At a cost of $670,000,000.
1:30:20
If that deal were executed, that would be $13,400,000 for miss Butros.
1:30:25
Is that right?
Louis Molina
1:30:27
Depending on what agreement Cushman and Wakefield might have with the ownership group of the Bronx Logistics Center.
1:30:37
We like I said, we cap the amounts that the conditions
Lincoln Restler
1:30:40
And it's capped at $13,400,000 is the maximum amount that miss Butchers could make on that purchase.
1:30:45
We're talking about very significant money.
1:30:47
Money.
1:30:47
And while you're saying
Louis Molina
1:30:48
our contract is now with miss Bouchows, our contract on