By: Amy Hopper, Associate
As with most businesses, teamwork is essential to a project’s success and commercial real estate (CRE) is no exception. CRE brokers, landlords, architects and construction managers, to name a few, all add value to projects by providing their unique perspectives and expertise. In this post I will discuss the steps involved when selecting a building for a commercial interiors tenant project from both the broker and the Architect’s perspective.
BUILDING EVALUATION
One of the first steps a company takes when their lease is expiring is to engage a CRE broker for assistance in evaluating their future real estate options. This will help the tenant determine whether they will renew their lease, renovate in place, or relocate.
Among other things, a broker will research vacant spaces and report back to the tenant on:
- parking options
- access to public transportation
- presence of a fitness center
- local food options for employees
- average employee commutes
After touring potential spaces, FORM Architects might comment on:
- window line i.e. access to natural light and views
- column spacing
- existing restroom ADA compliance
- existing mechanical systems
- items for potential reuse i.e. light fixtures, furniture
TEST-FITTING
At this stage, the tenant now has a wealth of information about their potential spaces. What has yet to be determined is how their unique space requirements might fit into each of the vacant buildings and/or their existing space. This process is called “test-fitting” and is a service that FORM Architects provides. Landlords consider this service to be a marketing tool and will often pay FORM to create test fits for the potential tenant.
When comparing potential buildings, brokers are most interested in:
- Rentable square footage (RSF) per seat
- Demising wall location
- Building x-factors, such as amenity spaces, that effect the building core factor i.e. training room and/or conference center
FORM assesses:
- departmental adjacencies
- brand visibility at the elevator lobby
- opportunity for creativity
BUDGETING
In order for the tenant to make a final decision, the cost to build out each potential space is determined.
FORM creates pricing notes to compliment the test fit plans drawn. Then we engage two to three General Contractor’s to put together budgets based on a test fit and pricing notes.
Brokers use the budgets from FORM to negotiate lease terms including a “tenant improvement allowance.”
Generally, these three steps (building evaluation, test fitting and budgeting) lead to the tenant signing a lease. By providing this high level summary of pre-lease activities, I hope to portray how the synergy between broker and Architect can be advantageous to the tenant.
Any questions? Did I use any CRE lingo that you’d like me to explain? Leave a comment and I’ll get back to you!
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