Who Pays the Tenant Rep Broker?
Short answer: the landlord does, in the large majority of retail and office leases. The commission is written into the listing agreement between the landlord and their broker, and it is split with whoever brings the tenant. If you sign a lease without representation, that money is not refunded to you and it does not reduce your rent. It goes entirely to the landlord's broker instead.
That is the part most first-time franchisees and small business owners do not know, and it is the reason unrepresented tenants pay for representation twice: once in commission they never see, and again in lease terms nobody negotiated on their behalf.
How the commission actually works
When a landlord lists space, they sign a listing agreement with a brokerage. That agreement sets a commission, usually a percentage of the total lease value over the term, and it specifies how much goes to a cooperating broker who brings a tenant.
Three things follow from that structure.
The money is already committed. The landlord budgeted for a full commission when they listed the space. It is priced into the deal before you appear.
It gets paid either way. If you show up unrepresented, the listing broker typically collects the whole thing rather than splitting it. Nothing is saved. The allocation just changes.
The listing broker works for the landlord. That is not a criticism, it is their job and a good one does it well. But it means that in an unrepresented deal, there is nobody in the room whose duty runs to you.
"Won't I get a better deal if I go direct?"
This is the most common version of the question and the reasoning behind it is sound. It just does not match how the money moves.
The intuition is that removing a broker removes a cost, and the savings get passed along. That would be true if the commission were charged per transaction. It is not. It is committed in the listing agreement regardless of how many brokers are involved.
Occasionally a landlord will offer a modest concession to an unrepresented tenant. It happens. What is worth weighing is whether that concession exceeds what representation would have negotiated in the terms below. In our experience it rarely does, because the concession is a one-time number and the lease terms compound over the whole term.
What you are actually buying
Base rent is the number everyone watches and it is rarely the number that decides whether the location works.
Tenant improvement allowance. How much the landlord contributes to building out the space. On a restaurant or a specialty retail buildout this is frequently the largest single number in the negotiation, and it is far more negotiable than rent.
Free rent during buildout. You are not open, you have no revenue, and permitting is slower than anyone plans for. Rent abatement during construction is standard and asking for it is normal.
Exclusivity. Whether the landlord can lease to a competing concept in the same center. For a franchise, this can be existential.
Co-tenancy. What happens to your rent if the anchor tenant leaves. A center without its anchor is a different business environment than the one you signed into.
Assignment and subletting. Whether you can transfer the lease if you sell the business or need to exit. Franchisees who ignore this find out at the worst possible time.
Renewal options. Whether you have the right to renew, and at what price. "At market rate" with no cap is not really a protection.
Personal guaranty. How much of your own assets are exposed and for how long. A limited or burn-off guaranty is a very different risk than an unlimited one, and it is negotiable.
None of these hurt on signing day. They hurt in year four, which is precisely why they get conceded by people negotiating their first lease.
What the San Antonio market looks like
Retail here is tight. Vacancy was 4.2% in Q1 2026 with average asking rents of $19.45 per square foot NNN. The range across submarkets is enormous: the CBD asks $33.47 while the Far West submarket asks $14.98. Net absorption stayed positive at roughly 338,000 square feet.
(Source: Partners Real Estate, San Antonio Retail Q1 2026.)
Two implications for a tenant.
Good space moves. In a 4.2% vacancy market you are not the only one looking, and hesitation costs sites.
The submarket spread is larger than most national site-selection models account for. A concept that works at $15 a foot on the Far West side may not work at CBD pricing. The trade area matters more than the rent number in isolation, and a franchisor's model built on national averages will not tell you that.
If you have signed a franchise agreement
You are on a clock. Your development schedule has dates in it, your franchisor has approval rights over the site, and the lease will outlast most other decisions you make about the business.
The best time to call is before you sign the franchise agreement, or immediately after. The worst time is when the development schedule is already tight and your options have narrowed to whatever happens to be listed.
Knowing what a franchisor's real estate department will approve before you fall in love with a location saves weeks you do not have.
Questions people ask
Does tenant representation cost me anything? In most retail and commercial leases, no. The landlord pays and it is split. Where an unusual situation exists, it should be disclosed to you in writing before you engage anyone.
What if the space is not listed with a broker? Some landlords, particularly smaller private owners, do not list. In that case the commission arrangement has to be negotiated directly, and it is one of the first things to establish. It is still frequently landlord-paid.
Can I use the listing broker as my broker too? That is intermediary representation in Texas and it requires written consent from both parties. It is legal and it happens. Understand that a broker in that position cannot advocate for one side against the other, which is most of what you want a tenant rep for.
Do I need a broker for a small space? The commission math is less compelling on a very small deal, but the lease terms are the same document with the same traps. A 1,200 square foot space still carries a personal guaranty.
Does my franchisor provide site selection? Many have a real estate department that approves sites and some provide criteria or a preferred vendor. Approval is not the same as representation. The franchisor's interest is a site that fits the brand; yours is a lease you can live with.
How long does it take to open a location in San Antonio? Longer than a first-time franchisee expects. Letter of intent, lease negotiation, permitting, and buildout each take longer than planned, and the city does not move faster because your schedule is tight.
What is a letter of intent and is it binding? A non-binding outline of the main business terms before lawyers draft the lease. It is where most of the real negotiation happens, and terms conceded in an LOI are difficult to recover later.
What is NNN? Triple net. You pay base rent plus a share of taxes, insurance, and common area maintenance. The quoted rate is not your total occupancy cost, and CAM in particular can move.
Can I negotiate the personal guaranty? Frequently, yes. A burn-off guaranty that reduces over time, or one capped at a number of months of rent, is a common outcome and a very different exposure than unlimited.
What happens if I need to close or sell the business? That depends entirely on the assignment and subletting language you agreed to. It is one of the most consequential clauses in the document and one of the least read.
Do you work with independent businesses, not just franchises? Yes. The work is identical for any business signing a commercial lease.
What about unusual uses? Some concepts carry siting and permitting constraints most brokers have never encountered. Licensed card clubs are an example, and we have represented two of them.
About The Trey Group
The Trey Group is a San Antonio real estate team operating under eXp Realty, serving Bexar, Comal, Kendall, and Guadalupe counties. J.J. Gorena handles commercial real estate and franchise tenant representation, TREC #522975. Robert "Bobby" Cortez handles residential sales and purchases, TREC #546997.
Opening a location in San Antonio? J.J. Gorena | (210) 367-6024
Schedule a 15 minute call: https://calendly.com/treygroupcommercial/15min
