Monday, February 16, 2009

Working Together to Complete an Office Build-out

Some agents specialize as leasing reps, others as tenant reps. I work with clients on both sides of the transaction. It gives me a good perspective on landlords and tenants, and how each is willing to work with the other to make for a signed lease and a long-term landlord/tenant relationship. The experience served me well in the leasing of an office in The Ponds.

The Ponds is a commercial condominium development off Route 50 in Chantilly, Virginia. Gill and his family purchased their 1,900 square foot unit as an investment, but like many purchasers of small office condos, had little or no experience leasing out commercial space. When I saw Gill's For Lease by Owner sign in the window, the space had been empty for close to two years. I gave him a call and proposed working for him. I know the area and had successfully leased two other units in The Ponds.

Gill's unit was in cold dark shell condition. When I listed it the third week of July, I suggested Gill proceed with a standard office build-out. This can take three to four months to complete, and most tenants for smaller offices do not have the time to wait. They generally want to occupy the space within a month or two. Gill proceeded to contact a contractor to complete the build-out, which would include installing the HVAC (heating, ventilation, air conditioner) system, electrical panel, plumbing, drop ceiling and lighting, and interior walls to create offices and a kitchenette, as well as finish work (paint, flooring, etc.)

In the meanwhile, I met Bill. Bill's company had a small office in Washington DC, and they were looking to move to Virginia. The Tyson's area made the most sense, and he called on one of our office listings in Vienna. That office did not meet his space needs and we started to talk about what he was looking for. It has been my experience that company offices are usually geographically close to the company principal's home. Bill lived in Virginia Run and The Ponds is a few miles down the road. When we began to talk about Chantilly, Bill was open to the location.

Not only did Bill find the location ideal, his business model was such that he had time to wait for a build-out. He was also excited to custom design his new office. By mid-August, tenant and landlord had agreed to all terms and by early September the lease was reviewed and signed. Bill contacted several contractors for estimates, but ultimately decided to work with Gill's contractor. Casey Cao of NorthEast Construction Corporation in Springfield did an excellent job. He was knowledgeable of Fairfax County building requirements and brought the project in pretty much on-time and as budgeted.

The office had some build-out challenges. It is an irregularly shaped, interior unit with the only natural light coming from the front windows. Bill's design ideas included lots of interior glass to capture and maximize the available light. Some of his requirements were standard, such as a nice reception area, but he also had some special requirements, including a large computer room with additional A/C needs that could be 'showcased' and on display to his customers.

By early January, the final inspection from Fairfax County was issued, and Bill and his company, Francis & Goodwin, could move into their new office. Landlord and tenant had a good start to a long-term relationship as they worked together to get the office completed, and I know I had a hand in facilitating both that relationship and a successful build-out.