By Cheryl Osborn, President and Found, CASCO CONTRACTORS
Most companies value their work space and it is an intrinsic part of how they do business – functionally and culturally. Leasing or buying a new workspace that requires tenant improvements seems like a natural part of the growing or downsizing process but it carries its own set of issues that need to be addressed. There are several things to keep in mind when going through this process but I am here to highlight the NINE MOST IMPORTANT CONSIDERATIONS WHEN TAKING ON A TENANT IMPROVEMENT
PROGRAM, PROGRAM, PROGRAM
Do your own programming beforehand. Let’s face it, companies change all the time – some on the edge of a dime and some in a more strategic, structured way. Regardless, you need to understand who your company is today, who it will be in a year and then in 3 years. If there is uncertainty, take that into consideration and maybe sign a shorter duration lease. If there is a strategic growth plan, make sure your space has the required expansion ability and if you find the right space, lock it in for a longer amount of time. Make sure you understand how the people will fit into the space and allow for extra space for employee amenities, circulation space and growth. This is what the millennials are looking for and these “fringes” are often overlooked when you are looking to maximize the square footage per person.
THE LEASE SAYS THAT?!?
First of all, make sure you allow enough time for the lease process and the construction (6 months before projected occupancy). Then, understand what is in your lease. This is where you become best friends with your broker. A lease is very complicated and the terms that you agree to do not “bend” – especially if it is in the landlord’s best interest. Make sure you are getting a fair deal that provides the rent that works for you and the tenant improvement allowance that is realistic. Understand your terms as well – can you use this money for furniture and fixtures or only “hard construction”.
IT’S ALL ABOUT THE DETAILS
Walk through the proposed floorplan, scope of work and all the details PRIOR to signing your lease. These details cannot be overstated to how important they are – for timing and for budget. With tenant improvement, any change after the deal is done costs money and time. Even just moving a wall or adding an office can create engineering and building permit nightmares so it is best to have the overall layout set in stone before you start the process. Make sure your architect or your contractor spend at least 1 hour per 6,000 sf with you reviewing the details prior to starting.
THERE ARE OPTIONS?!?
Have a lot of options (i.e. alternates to your pricing). Sometimes the idea of something is great but you have to really evaluate the cost and the benefit and the only way to do that is to see what those costs are and make educated decisions BEFORE you start construction. This could be upgraded finishes, additional workspace benefits or just any whim you would love to see come to fruition (i.e. Google slide, company gym, nap pods…you get the picture).
STAY TUNED! PART TWO COMING FEBRUARY 12, 2016!