Pre-Lease Resources Enhance Return

14 01 2011

Are you giving yourself, your company and your clients the best opportunity to succeed with a particular real estate/construction transaction? Perennial, top-performing deal-makers tend to surround themselves with top-tier alliances that consistently deliver best-in-class services, information and resources, giving that deal maker the confidence to pull the trigger on critical decisions that will affect the level of success and the return on investment of both time and capital.

Enhancing ROI through professional pre-lease guidance and preconstruction services is a process that involves trust, commitment and focus. Gone are the days that a tenant rep broker can walk his or her client through a variety of available locations, issue an RFP for lease consideration, negotiate the terms, sign the lease and move to the next transaction. The same holds true for any third-party project manager or A&E firm guiding their respective clients. A thorough understanding of the potential constuctability issues; scheduling implications; latent defects, long lead items; MEP design build benefits or detriments; long-term benefits of sustainable design and construction; cost-segregation opportunities, etc, will lead to greater confidence and a consistent economic result.

Further, in markets where landlords are delivering turnkey space to their tenants, the parties representing the landlord have a fiduciary duty to maximize the deal value for the landlord/building owner. Attention should be paid to minimize downtime and improvement costs via lean construction practices, while contemplating the use of sustainable design and materials for long-term function.

Financially qualifying the general contractor will be important to avoid potential mechanics lien issues, project delays caused by poor financial management of the project, costly insurance premiums for poor safety records, and, in some cases the capacity to procure the materials and complete the project. Engaging general contractors with a long history of exemplary safety records and high bonding capacity will greatly reduce the risk associated with the project.

Early planning and engagement of the project team allows for proactive design, consultation and overall project management rather than a reactive approach, which tends to be more costly for a similar, if not inferior product. In most instances, the real estate advisor’s fiduciary role is to identify product alternatives, educate the client for optimum decision-making capacity, negotiate terms based on market conditions, and manage their client’s expectations.  The best way to serve that client, is to consistently deliver reliable information and guidance from credible resources/vendors. If the vendor values relationships and repeat business, care will be taken to deliver with integrity, such that there are no surprises as the project nears completion. 

Utilize expert resources to maximize success! Are you partnered for success?








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