In my recent posts we have been walking through the office leasing process step-by-step from the tenant’s perspective discussing:
- Making an informed decision about your office space
- Most common mistakes made by tenants
- Determining your office space needs
- Evaluating office space alternatives
At this point, you have evaluated the market and various buildings to select the best property based on carefully considered requirements and objectives. Whether it is a relocation or renewal and slight re-design of your existing space, your broker has negotiated the best possible deal terms based on market conditions and your operating leverage, and now it is time to complete the deal and prepare your space for occupancy.
Completing or varying your lease documentation; commencing the full design process.
Letter of intent
Once the particulars of a lease agreement and business terms are negotiated, both parties will sign a letter of intent. This document is generally not legally binding but is a gesture of good faith that terms have been agreed. When signed, this document will be used to brief attorneys so that the final lease documents can be prepared.
It is important that you have your legal counsel experienced in real estate, review and negotiate the final lease document or lease amendment. In most cases the lease agreement or amendment is prepared by the Landlord’s legal counsel and it is important to address a whole myriad of issues in the agreement to insure your signing a contract that will mitigate your risk as best as possible going forward.
Many times these negotiations in addition to legal issues involve quasi business points, so while your legal counsel should conduct these negotiations, your tenant representative broker should be involved in assisting your legal counsel, by providing input and making sure the business terms are reflective as to what has been agreed upon.
Workplace design issues
When a lease agreement is complete, the workplace tenant improvement process begins immediately. At this stage, you should have completed:
- Needs analysis
- Space plan
- Test fit
This will enable you to engage a designer, who may be the workplace designer, with accurate information regarding your requirements. The sooner a designer is engaged, the better the outcome. It is vital that this stage is viewed as an investment in the organization’s future and not merely a tenant improvement. The development of work space should be directly linked with your organizational strategy.
The final stage of the process provides the perfect opportunity to re-think office imperatives and promote organizational effectiveness, community, communication and productivity. The sooner you engage a capable designer and project manager, the more time you will have to create the space that will match your organization’s vision.
Design development / construction approval
- Engagement and full briefing of all other specialists and consultants
- Commencement of detailed design
- Development of finishes selection
- Short list of furniture options
- Review of likely tenant improvement costs
- Detailed construction timeline preparation
- Provide documentation for building owner and authorities
- Stake holder coordination
Detailed design and documentation phase
- Preparation of documentation for a construction bid
- Finalize furniture selection
- Finalize the selection of tenant improvement finishes
- Obtain building and construction permitting
Bid review phase
- Determine agreed bid review panel
- Review and assess bid responses
- Bid management and analysis
Contract administration / tenant improvement
- Manage the delivery process and administer contracts
- Appoint all approved contractors and suppliers including lead tenant improvement contractor
- Coordination of all required meetings
- Coordination of quality control inspections
- Cost and variation management
- Project manage delivery program
Project completion / occupation
- Oversee practical completion
- Timely issue of the Code of Compliance certificate
- Inspection and sign-off
- Manage the identification and completion of all outstanding and defective works
- Cost reporting and final accounts
- As-built drawings, operating manuals, guarantees and warranties
- Final inspection and completion of works at the end of the defects liability period
The office leasing process is a complex and multi-phased exercise that involves the expertise of numerous outside consultants. Colliers International can not only assist you in making the best decision and negotiating the best deal, but also assist you in managing and coordinating the entire process, to insure this endeavor is least possible disruption of your time and you can concentrate on running your business.