If you’re finding yourself disappointed and frustrated when the pricing for your upcoming project has bid results ending up all across the board, chances are you could have done a bit more homework before sending out that RFP.

In a workshop that I will be giving for the Institute of Real Estate Management (IREM) on August 25th, one of the topics I will touch on is how often an RFP is sent out without properly talking to the bidders first.

There are many reasons why just emailing an RFP to someone without having a conversation results in poor bid quality.  Without communicating to the people you expect to provide proposals, the following may happen:

1) You may end up sending your RFP to bidders who are too busy or uninterested in your project.  This can result in fewer complete and competitive bids.  If the vendors aren’t interested there is no motivation to sharpen their pencils.

2) Your vendors might take longer to respond than expected. When bidders have a heads up the RFP is coming, they can properly plan to respond to it and ask some questions in advance.

3) You may end up with bids from vendor who aren’t the best fit for your project.  Having that initial conversation with your vendors before sending out the RFP gives you a chance to vet out each company and if they have the appropriate skill sets.

4) You might miss out on key advice.  When introducing a project before it goes out to bid, your bidders may suggest a better approach to pricing out and performing the job.  Hear what they have to say!

It is definitely worth the time upfront to check in with your bidders in advance to save you troubles in the future…

When searching for your company’s next office space with your commercial real estate broker there are countless variables that come into play.  Your search likely starts with narrowing the nearby availabilities based on desired location, followed by filters of square footage, lease term, and building amenities offered.

If your real estate broker is savvy enough, he or she will advise you that these variables are just one piece of the equation.  Getting a good understanding of the existing conditions of the office space’s interior build-out is critical towards determining if the economies of the deal will make sense.  Comparing an office suite in raw shell condition with a suite that was recently improved is like comparing apples and grapefruits.

As early as in the process of touring office space before a lease offer, or Letter of Intent (LOI) is drafted, it should be acknowledged that the build-out planning process has begun.  In many cases, it can be helpful to enlist the expertise of an architect to conduct what is called a fit plan, to determine how well the tenant will fit in the prospective suite. The architect will often see how many workstations, offices, conference rooms, and other rooms will fit into the existing space.

Once a fit plan has been developed, with input from other industry partners, a high-level estimate and schedule can be developed for the proposed space.  In some spaces with lots of existing improvements, it may be strategic to reuse as much as possible, which in more shell condition spaces, it will be necessary to spend more tenant improvement dollars.

Once the team has a 30,000 foot high view of what the tenant improvements should be, the economics of the leasing deal will start to present itself.  Using the broker as the liaison, lease offers can be compared at each building based on how the total improvements compare to the landlord’s contribution, i.e. the total out of pocket tenant improvements.

There are other considerations one should consider when comparing potential spaces in the lens of a builder.  Some questions to ask for contrasting a short list of office spaces:

• Do any of the candidate spaces have a higher risk for unforeseen conditions to present themselves?  Older buildings or existing tenant improvements that have not been updated in very long periods of time could present a greater chance of hidden conditions such as hazardous materials

• Do any of the candidate spaces inherit code compliance issues that will be triggered when a permit is pulled?  This could range from anything from ADA upgrades, life safety device coverage, sprinkler coverage, Title 24 upgrades, etc.

• What are some of the requirements of the building management and ownership at the various properties?  It’s helpful to know if one property has any special rules and regulations such as when certain activities can be performed.  This can potentially sway the budget.

• Do the candidate buildings require union labor?  If all things are equal and one building requires union labor and one doesn’t, you guessed it, the build-out in the non-union labor building will not be as expensive as the one requiring union labor.

These considerations will give you a nice head start in making sure your future build-out project runs smooth before agreeing to move forward on selecting the suite in the first place.

We’ve discussed in a post last year how important it is to add variety in your work day and break up your sitting with things like standing desks.

It shouldn’t be news to anyone that sitting too long is hazardous to your health.  What raised peaked my interest was this article outlining that the body can be at risk of being plagued with more conditions that I ever imagined.

All the more reason when planning your new office space to allocate an adequate allowance in your budget to not just make sure things look nice, but to make sure everyone ends up comfortable…

Today we just wrapped up a project that we have been working on for about six months and to say it had its challenges would be a major understatement.  We uncovered countless unforeseen conditions while having to meet a tight schedule despite the client’s continued added scope requests.

Sometimes it isn’t until after the project’s conclusion, the moment the client sees everyone’s blood, sweat, and tears, do we in the construction industry realize that it was all worth it.  Sometimes it isn’t until the end – when the tangible formation is complete and viewed by the public – that we realize why we do this for a living.

But regardless of how we did with our budget or schedule, and outside of how much everyone loved how it turned out, what should equality be valued is how well the project team gets along.

When everyone works together as a team in unison – when fingers aren’t pointed, but instead collaboration happens – it shows in the final product.  And most importantly, playing nicely together makes coming into work each day much more tolerable…

Colton Commercial & Partners, Inc.’s Project Management Division has had an active run in its first year since launching the new service line.  The new division has worked with both tenant clients such as Premier Staffing and Lending Home and landlord clients such as Vornado Realty Trust and Concordia-Argonaut.  Some project management clients have been been generated from the company’s brokerage transactions, as clients are drawn to working with a team that offers multiple lines of service.

In an effort to expand growth into the next year of operations, the company is pleased to announce Sonia C. Santiago, Senior Project Manager, as the newest member to the team.  Sonia has a rich background in working with both corporate tenant and local landlord clients, and most recently was Principle of Pillar Consulting for 20 years.  Colton Commercial & Partners, Inc. is excited to bring Sonia and her skill sets to the organization.

Sonia C. Santiago

As much as I love summer it can be a frustrating time because nothing seems to happen as quick as you’re used to.

We are all entitled to a battery recharge – and the summer time is a great time for a vacation.  Summer vacations affect all levels of construction ranging from:

An owner’s decision making process, the correspondence speed of a project team, productivity from crews in the field to the manufacturing process of materials.

It is important to factor in this summer slowdown into your project schedules.

When it comes to the components of an office building, one thing a lot of people take for granted is the security system.   Often when building out interior office space, the infrastructure for security is an after thought.  Recently I sat down with Bob DiProspero, who represents Kastle System’s relatively new San Francisco division, to learn about his business in helping companies and landlords better control access to their premises.

 The TI Tales: Kastle Systems provides security solutions for both tenant-clients and landlord-clients.  What words of advice do you have to companies planning their tenant improvement projects from a security system standpoint?

 Bob DiProspero: There are a number of different vendors that install security equipment, then step away from the project (and client) once complete.  The most important aspects of security systems occur after the installation is complete and the end user takes ownership.  Users should focus on the ongoing support and system operation.  The client will realize a better return on their investment and their system will work much more effectively and for a longer period of time. 

 TTT: On the surface, to those not in the industry, it can be difficult to tell the difference between various security vendors and the equipment they provide.  How do you differentiate yourselves as a preferred vendor?

 BP: Kastle differentiates itself on a number of fronts.  The two areas we focus on are providing exceptional service experience for our clients and by being a leader in innovation.  If done well, security can become a real amenity versus simply pieces of equipment.

 TTT: What are some of the biggest frustrations that building owners and managers complaint of with regards to their building security system?

 BP: In our 43 years of providing security services, we’ve found that poor service, stagnant technology and ineffective tools are the most common complaints from building owners/managers.  Without these core capabilities, a building staff cannot serve its tenants as effectively.

 TTT: Where do you see the future of office building security infrastructure?  What new technologies do you envision emerging?

BP: Like many industries, the biggest emerging technology in security will be the use of smart phones.  We’re about to enter an era where customers can unlock their doors with a hands-free access from their phones without using any key cards.  Being able to integrate the smart phone technology into backend systems will be the key driver in the success of the platform moving forward.

TTT: Do you see opportunities to integrate security infrastructure with other building systems to make buildings more efficient in the same way we’ve seen destination dispatch elevators communicate with card readers?

 BP: The industry is certainly trending in that direction.  As security systems migrate to more of an industry standard platform there will be additional opportunities to tie in multiple building systems together.  “Big Data” will allow end users to run buildings much smarter and more efficient.

Ergonomic office design continues to be a sought after trend in the workplace.  The fact of the matter is we are all sitting too much.  

There are desks out there that elevate to a standing position with the touch of a button, but these desks are almost all over $1,000 and switching from down to up can take a long time.

A great alternative is from Varidesk, which offers a stand-up solution that sits on top of almost any desk, is only about $400, and manually switches positions in less than two seconds.

Companies moving into new office space should consider this as a fresh start to make investments such as this to improve the health and well-being of their staff.

You can tell it’s a strong economy when a vendor tells you they are too busy.  Sometimes it can seem like winning the lottery when you can actually get someone on the phone when you need them.

When the economy is on fire, it’s important to shift your attitude if you have a new project coming up.

1) Keep relationships strong before your project requirements.  It’s really a two way street.  Not only should your contractors, consultants, and vendors be trying to stay in front of you to win future business, but you as the client need to keep in touch with people you will need to call upon as service providers in the future if you expect them to be responsive.  For example, if you expect to have a big project coming up in the next year, periodically reaching out to or meeting with potential bidders can be a great way to prepare them for your job and you are more likely to get a good response from your RFP.

2) Reconsider that long list of bidders.  Construction costs continue to escalate, and part of that is because contractors, consultants, and vendors are busier and can be more selective on which projects they spend their time on.  While intuition tells us that the more bidders we get, the better price we will get, a strong market allows bidders with a deep pipeline to be in control.  When asked to compete on projects with 3 or more bidders, vendors often will spend less time to get a handle on the project and will pad their number because they know their chances are slim.  Alternatively, a vendor may “respectfully decline” a project altogether because they don’t want to spend their resources winning business if their is so much else out their for them.  In short, negotiating an agreement with one vendor in some cases can be more financially beneficial in this environment.

3) Make your requirements very clear.  This one is a good practice regardless of the economic condition, but it is especially applicable when things are hot.  If you have a difficult time pinning down exactly what your needs are and have an internal decision making process as complex as the US Senate, vendors are not going to find you a favorable client.  When vendors have a deep pipeline they can afford to have a choice of who they work for and indecisiveness can lead to frustration, a lack of vendor responsiveness, and potentially inflated price.

4)  Don’t cry wolf.  Be careful not to waste people’s time.  Imagine calling upon a favorite contractor every time “you think you have a project” – but before you take the time yourself to vet if the project will actually happen.  Eventually contractors will lose trust and interest.  It is important in the client/vendor relationship to do your homework as well.   

By considering the above and understanding the point of view of the vendors, we can ensure we get the service and pricing we deserve.

Often when a tenant tours through potential future office space, we often find ourselves trying to take a hack at putting a budget together.  The scope of work is often extremely vague and a tremendous amount of assumptions must be made.  How do you make financial sense of a project without wasting too much time and effort to determine if you should move forward?

1) Figure out what number will kill the deal.  Tenants planning a future build-out should be transparent about their budget expectations so the teams they hire can plan accordingly.  Tenants can often spin their wheels directing vendors and waiting for pricing for budgets that are way out of their price range.  If a budget comes back and the client says that the numbers need to be cut in half, some communication clearly didn’t happen at the start.

2) Use comps from past projects before getting too far into it.  As a time saving “gut-check”, tenants planning a future build-out should ask for their vendors to provide a budget range based on some recent comparable projects that sound similar to what they are envisioning.  This can be a quick way to make sure that the scope is likely to be within the ballpark before too much design and pricing exercises occur.

3) Attempt to get input at all levels.  It’s never too early for tenants to survey their needs internally – and the review process shouldn’t take very long.  The key decision makers might think they completely understand the needs of their future office space, but they should be encouraged to run early design concepts with their teams to confirm that their new office space won’t lack functionality they are used to.  For example, imagine a team of executives tour potential vacant office space and work with a project team on some space planning.  A budget is developed based off of the layout and then the lease is signed – yet nobody else in the company gets to see the layout until its too late.  The firm’s accounting staff report that they are concerned of noise because they are planned to be by the kitchen, and others are upset that the new office won’t have the small conference rooms they utilize in their current space.  This would would have been good to know before the tenant committed to the lease terms.

4) Get a handle on what the Landlord is offering.  It’s one thing to get a good handle on what the tenant improvement costs will be, but you need to be comfortable with what the Landlord is willing to chip in.  If you get a sense early on that the Landlord is not willing to pitch in to pay for necessary improvements needed to get your space ready, perhaps the deal was not meant to be and you shouldn’t be wasting your time.