As an entrepreneur, a start-up, and the owner of a business that specializes in tenant representation, I have a unique perspective on my company’s office lease. However, there is nothing like actually signing on the dotted line. For me the lease is the easy part. So what did I learn that I did not know already after some 2 million square feet for $255 million in real estate transactions over a 10-year career specifically in real estate?
There are some expenses that you need to plan for outside of the tenant improvements.
- Audio Visual Cabling and IT Cabling is expensive. I don’t know how many times as a real estate broker that I flippantly told a business owner cabling was a tenant expense that could be $1.50 to $3 per square foot. After all, it’s the company’s money, and it’s just a few thousand. First of all, this is something every business owner should plan for, and it always costs more than you think it will. There are two solutions to this problem: 1) negotiate the ability to use Tenant Improvement money to fund cabling or 2) negotiate a separate cabling allowance.
- Furniture and furniture installation is expensive. We were fortunate to really get our furniture for hardly anything, but the installation can be extremely expensive. Yet again, I had Sone to help find the right vendor to fit our budget.
- Hire the Whitebox Project Management Team. I like the thrill of doing something on my own as much as the next guy… That drive led me to start my own business. I know a lot about market terms and leases, but I needed an expert that knows construction and knows about interiors to help me.
- I was fortunate to have the Sone at my disposal. He continually updated me on the progress of the buildout. He also protected me from change orders and other unnecessary expenses. Furthermore, he helped me plan for items like IT/AV cabling, and made sure this was done as the walls went up, not after the space was built. Landlords are not responsible for cabling, and will not accommodate this as they build unless you have someone there to watch and ask for it.
- He is there to protect you. He reads the complex construction drawings and bids to make sense of them. He can also create competition for the bids on contractors, furniture, cabling vendors, and movers. The best part is that most of the time, is fee is at no cost.
- Most Landlord’s try to get a construction management fee of about five percent of the tenant’s improvement costs. Our tenant advisors and construction management team will work to get the landlord to a one percent construction oversight/review fee and take three percent of the construction management fee the landlord was already going to receive. If this scenario is successful, you just saved one percent.
The biggest thing I learned was that I needed to engage a professional, a specialist, to guide me through the construction process.
The Whitebox team is here to guide you.