Planning your Lease Space to Best Suit your Needs

Over the last thirty years of my career as a director of property management I’ve seen a lot of well planned office, retail and even industrial spaces that have enhanced the success of that particular business. The vision and plan of the owner can make-or-break the everyday needs of the staff in their newly leased environment. Space planning usually occurs after an initial proposal has been accepted however sometimes it’s delayed until the major points of the deal have been agreed upon and your credit has been reviewed. The proposals are conditioned upon reaching a mutually satisfactory space plan and a review of the associated costs.

Whether you need space planning services or not will depend on the size of your transaction and the need to customize the area to meet your requirements. If there is any interior construction the services of a qualified professional is not optional but essential. Building requires permits and permits require inspection. Permit inspections could uncover required code corrections. Using a qualified architect will alert you to potential problems before you sign a lease. In a tight market like we are in now, you don’t want any surprises when you are responsible for the construction improvements that are made. Avoid unhappy surprises and use a qualified space planner or architect when modifications are necessary.

Retail tenants are usually expected to provide their own interior improvements. Therefore they must provide the landlord with designs for their approval. Industrial and warehouse tenants have less use for space planning, except when there is a large component of office space to be developed, such as in an R& D property (Research and development).

A tenant requiring a substantial amount of office space (10,000 sq. ft. and up) is well advised to consider retaining his or her own architect. While some building owners retain their own architects as an accommodation to prospective tenants, there are several good reasons to hire your own architect. Due to the complex nature of today’s office environment (furniture and filing systems, computer equipment, printers, etc.) your architect will understand your needs. Additionally, when you narrow down your choices to the final two office selections your architect will be a good sounding board for work flow, efficiency and functionally.

In a softer market you can successfully negotiate to have your architect’s fees paid as part of the tenant’s improvements because the building owners often have budgeted for architect design services, and are motivated to finalize a substantial lease for a signature tenant.

When I’ve seen problems arise during a transaction that are centered around space planning issues is when the architect has not been currently working with “commercial property”. Where problems can arise is in the underestimation of costs of a commercial renovation; lack of knowledge about code issues and over designing the space. Commercial interior space planning is relatively easy to do provided the preliminary plans are done by a qualified commercial architect. Stick with a specialist and you’ll avoid many problems.

Space planning is normally a two to three week process to create a preliminary plan and is usually done after the terms in your contract are agreed upon. First, a set of drawings have to be developed, reviewed and are suitable for obtaining initial estimates from the contractors. Depending upon the details of the project allow for about one to two weeks to complete the estimates. At the first meeting with the architect you will convey your wishes and your requirements. The architect develops the first draft, submits it to both you, the owner of the business and your landlord for comments and then makes the required revisions.

The technical review of the building is an important step in the process. The first part of the review is done during the last tour of the final two or three qualified sites. At that time, you will need to review conditions in the building that affect the functional viability of the space (i.e. air conditioning, elevator size, etc.).

A space planner or architect can complete the second and more thorough stage of the technical review. If you’re using an architect provided by the owner of the building, be sure to ask if there are any functional or code issues with the building that might increase costs. Some areas of concern include potential problems with interior construction; the presence of asbestos; compliance with the ADA (the Americans with Disabilities Act; the life safety systems; energy conservation compliances or any other issues critical to the quality of your tenancy.

During the time the space planning is being performed you will be reviewing the legal aspects of the lease contract simultaneously. Working with a good space planner is as important as working with an experienced commercial real estate advisor, especially in our fast paced, hectic market. Planning is as smart a thing to do with office space as it is in life.

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