BUSINESS OWNERS – THE MUST KNOWS WHEN BUILDING OUT OFFICE OR RETAIL SPACE
By Tommy Burt
The majority of businesses do not move to a new headquarters or a new facility on a whim. Constructing a facility or building out an office is an intensive process, and as part of the total relocation, can seem overwhelming. Before hardhats can be donned and hammers start flying, company leaders have many decisions in front of them. The approach taken at the inception of the project can go a long way toward avoiding last minute derailments.
Real Timeline and Team
While circumstances and needs vary for every organization, the further in advance business owners work, the better. Construction time itself can range broadly, depending on a number of factors specific to the company and its business. As a general range, a 5,000 to 10,000 square foot facility requires approximately eight weeks. However, the decisions and process leading up to that point should not be underestimated. To avoid disruptions to business, and transition as seamlessly as possible into a new space, defining a clear roadmap with plenty of time built in is key.
The best advice for any business endeavoring on a move requiring construction is to thoroughly vet and review all the professionals who will be involved in the project, including the broker, architect and commercial contractor. In retaining services for a large and important investment, it’s important to be diligent on all counts. Businesses should request proposals, conduct interviews of the construction team and review their references as well as their portfolios. A strong company will have a track record of performing for other businesses.
Vetting the General Contractor
While many think of costs first, the people at the general contracting firm and the processes the company leverages to bring a project together are central components to a successful build-out. Beyond materials and design, questions to ask general contractors include: Is there a senior team member or principal involved? How is the team structured? Who are the points of contact? Request and expect to meet all the key team members and points-of-contact, including the senior leader of the project, superintendent, project manager and support team.
Add experience with permitting and building enforcement codes to the list of “must-haves” in a general contracting firm. Each city and its municipalities are different when it comes to the permitting process for a commercial construction project, which can create complications. It is important to select a general contractor that has permitting consultants that are familiar and up-to-date on the guidelines and requirements. New and changing building codes are a constant.
The way a general contracting team collaborates and provides information is as important as their experience. For example, how accessible is the superintendent and project manager? Who is available as the main point of contact for key issues? How frequently are meetings held? Ultimately, business owners and their executives need to make sure the general contractor has a well-established communications process. Knowing the path for information will help to minimize miscommunication.
To this end, it’s important for companies themselves to designate their own team members to be engaged with the project from the beginning to end. The facility manager, chief operating officer or director of operations often leads this role. Decisions need to be made throughout the process and delegating to someone focused on the task minimizes distractions from a company’s daily business.
General Contractors and Costs
Increasingly, leading organizations are benefitting from bringing general contractors into the planning at an early stage. The benefits include the ability to undertake in-depth pre-construction planning and exercises to establish budgets ahead of time – enabling the team to design and build within a well-conceived budget. By integrating construction into the earliest planning, companies have the opportunity to analyze their costs closely and mitigate potential surprises. Delivering a project on-time and within budget means having all the cards on the table.
Integrating the construction team fully helps to ensure immediate actions are taken if there needs to be modification in a decision. This is a preventative measure that protects companies and creates efficiencies.
Businesses should be cautious in their decision-making and realistic about the expectations they have regarding the cost of construction. To accomplish that, it is imperative to weigh the specific finishes and costs of their space with the length of the lease. It is well worth the time and effort to thoroughly evaluate a space with an architect and general contractor to determine exactly what the objectives and budget parameters are for the space.
Businesses can reduce costs by getting creative with their finishes and material choices. To maximize budgets, business owners should suspend preconceived notions about design; today there is a proliferation of innovative, cost-effective choices.
What can the typical business expect to spend on construction? To finish-out shell space, the price of materials and construction is approximately $35 to $40 per square-foot in today’s economy; this estimate only pertains to construction. On shell, or unfinished space, businesses can expect landlord construction allowances in the approximate range of $20 to $25 per square-foot.
Projects that have come together on-time and on-budget have many things in common: a sound team, a robust management process and a collaborative approach. There are many opportunities in construction to avoid pitfalls through early planning and by making decisions in-line with the business’ operational needs.
Tommy Burt is CEO and co-founder of Burt-Watts and has more than 20 years of experience in general contracting, serving diverse businesses throughout Central Texas.