Hiring a project management firm to oversee all components of your commercial real estate project from inception to completion will maximize cost savings and spare you headaches down the road. Yet, regrettably, this crucial step is often put on the back burner until a lease is signed or the conceptual design begins. This is a common mistake—and it is unfortunate that many companies do not realize the value a project manager can add to a project’s early stages.
As an independent third party, a project management firm will provide you vital information with no conflict of interest, since they do not sell, build, or design anything, nor are they tied to a commission for a transaction being completed. A project management firm’s freedom from such interests enables it to guide you to make the best decision for your organization, not its own.
In fact, a project management firm must be involved in the early stages of a company’s real estate portfolio planning, because it can acquire a complete understanding of the organization’s goals, as well as the reasons why an expansion, a consolidation of multiple locations, a lease renewal or expiration, or even a downsizing may be infeasible. With a basic comprehension of your company goals and deadlines, your project manager can guide you through the latest real estate market trends, deliver a project cost estimate, and help you lay out a general project schedule based upon your deadlines.
After reviewing a project’s feasibility and finalizing a justification for moving it forward, a project management firm can begin to facilitate the RFP process for real estate brokerage services based upon your needs and goals as an organization. Once your broker is selected and you begin to evaluate potential locations for your project, your project manager can estimate costs of various sites so you can compare apples to apples subjectively with no outside influences, since the PM will not receive any money on the real estate transaction itself.
Your project manager can also provide all in-cost estimates beyond typical construction and relocation fees, e.g., costs of building options (renovation vs. out-of-the-ground construction), various scenarios (turn-key vs. tenant improvement), and specific numbers for ancillary items such as IT, security, signage and move management, instead of the all-too-common “placeholder numbers” that do not accurately reflect market prices for these services and products. (“Placeholder numbers” are a sure way to blow your budget.)
Furthermore, your project manager can act as an intermediary in the lease negotiation, review work letters to ensure all costs are accounted for and the schedule makes sense, manage the selection of vendors (architects, engineers, general contractors, IT providers, materials suppliers, specialty consultants, etc.), and help you to create a project mission statement, a project charter, and a 30-to-90-day kickoff schedule to ensure that once the lease is signed the project team is moving forward.
At the end of the day, your project manager should be the first consultant to be involved with your real estate project, your main go-to person over its duration, and the final overseer at closeout and move-in time. This concept-to-completion formula that only an independent project management firm can offer will allow you maximum savings on your real estate project, a better return on your investment, and insurance that your interests—and no one else’s—are being accounted for every step of the way.