Brokers Can Help Guide Office Relocations, Too!
When your business has outgrown its’ current facilities, or the lease is about to expire, it's time to move. A new resource for facilitating this move has emerged — the commercial real estate broker.
That's right — the person helping you find the perfect location for your business is also educating you and working as an advocate on your behalf. In larger commercial real estate markets like Chicago, Dallas and New York, it is not uncommon for business owners and corporate facility management teams to rely on broker-facilitated relocation logistics services.
We're now seeing this trend emerge in the Puget Sound region - which is why it's important to understand the key steps and potential pitfalls that happen during broker-facilitated moves:
Step 1: Establish a Business Relationship
Understanding the relationship between business and commercial real estate brokers brings value to both parties.
Many brokers are beginning to understand the value of serving not only as the "deal mare" but also as a "partner." Being a partner differentiates them from the competition and strengthens their client relationships. More importantly, stepping into this role pays dividends in repeat business and referrals for years to come.
For the broker's partnership to succeed, relocation planning and project management must start early in the process of qualifying buildings and sites. Most brokers will assist the client with strategic planning for facility requirements during the discovery process by analyzing business objectives and goals. Brokers will then identify space alternatives to create a "short list" of buildings/sites that meet the requirements.
Step 2: Evaluate Relocation Components
The next step is when the broker and client evaluate prospective properties. Unfortunately, this is also where most mistakes are made. By not implementing a sound project management and relocation planning process, the true cost of the relocation is generally not determined before negotiating the lease.
There are five basic cost components to planning a corporate relocation: space planning, communication infrastructure, furniture, relocation/installation, and space decommissioning. Together, these components account for 30 to 40 percent of the relocation budget. To avoid cost overruns and long-lasting consequences for the client, it's important to accurately assessing each before negotiating a long-term lease.
- Space planning — Evaluate work flow, growth, and company culture to create a new office space environment.
- Technology services — Establish the voice and data technology requirements – including the cabling infrastructure required to support it.
- Furniture analysis — Evaluate existing furniture and assess new, used, or refurbished options.
- Relocation/installation — Calculate the costs associated with moving the furniture, equipment, and contents to the new facility.
- Space decommissioning — Costs will be incurred preparing the old space for return to the landlord. This may include light construction and/or the removal of cabling.
All too frequently, the budget has been depleted well before it is time for the actual move. Properly planning and allocating funds will result in a successful relocation. The goal is to prevent long-term facility management problems that result from poor decisions made during the project analysis phase.
A clear understanding and accurate assessment of all costs are necessary before entering into negotiations. Knowing the costs is the only way to allocate for tenant improvements and to secure appropriate lease terms. By being properly prepared by the broker's project management team, the client will be able to clearly express their needs. The property owner and client will more likely arrive at mutually satisfactory terms and conditions.
Step 3: Implement a Planning Process
The implementation process will be made easier because of the time spent assessing the client's needs early in the process. Once the lease is signed, construction plans can be drawn, and permit applications filed. Space plans are turned into action plans and then fine-tuned. New furnishings are ordered, installation begins, and the remaining equipment and contents moved with precision and timing. The final decommissioning will return the previous space to the landlord and a new phase of the client's corporate growth will begin.
Successful brokers and their firms, both small and large, are becoming more involved in the move process. By taking the steps necessary to make certain clients achieve success and maximum value from their newly leased property, brokers increase their credibility and reputation in the marketplace.
By becoming partners, brokers can stay in the forefront of a competitive commercial real estate marketplace and establish a legacy of service excellence.
When it's time to move your business, your commercial real estate broker can provide more help than you would expect. Want to learn more? Contact us for additional relocation and move management tips!
This article was originally published in The Puget Sound Business Journal and is used with permission.