Building out a commercial real estate space can be a daunting task. A great amount of time needs to be allotted and as a busy business owner or key executive, managing a build out and applying for permit packages are additional tasks on your already full plate. It’s only logical that hiring a good general contractor and architect is your best option. But hiring a great build out team can be like rolling the dice in Las Vegas. Most businesses don’t perform the due diligence of researching and reading reviews on general contractors and architects. Your new office, flex, retail, warehouse, or industrial space will need an architect to plan and draw the design, and once approved, you will be able to move forward to the city’s permitting process. If you hire a great commercial real estate general contractor, the designing and build out process will be much smoother.
Now that you realize how painful the build out process can be, questions are popping into your mind: Who should you hire first? A commercial real estate general contractor or an architect? Are there best practices you should know about before hiring a general contractor for your commercial space build out? What are the top 7 suggestions you should know about when hiring an architect? How do I know if a general contractor is an outstanding one? Can a property management company be your general contractor and architect? Say no more! Keep reading, and these questions will be answered for you below.
Who Should I Hire First, a Commercial Real Estate General Contractor or an Architect for my Company’s Office Space Build Out?
You may be asking, who should you hire first? A commercial real estate general contractor or an architect? Honestly, you will have to hire both in order to start your tenant construction build out process, so you can either hire an architect or a general contractor first.
An architect designs, plans, and reviews the intended construction of the commercial space. The architect’s job is to ensure that the design of the space will be suitable to what the tenant needs while considering the future functionality of the build out space. On the other hand, a general contractor is the one who takes care of executing the construction plan of the commercial office, retail, flex, or warehouse space. Executing the construction plan is when electricians, plumbers, HVAC technicians, and etc. work together to finish the build out. It is also the general contractor’s responsibility to oversee the day-to-day construction build out, management of vendors, and communication of information to all who are involved in the tenant construction build out process.
The architect and general contractor are going to collaborate and apply to the city for commercial real estate design permits before the construction build out project is started. It is important that both the architect and general contractor can work together smoothly to make the permitting and build out process flawless.
What are the Best Practices Before Hiring an Excellent General Contractor for Your Commercial Office Space Build Out?
Managing a tenant construction build out on your own can take up time and can be stressful. Business owners like you need to focus on growing your business rather than processing permits or managing a construction site. Choosing the right commercial real estate general contractor to build your new office is essential. When you choose the right general contractor for the job, it will save you time and money; and it will also allow you to have more free time to focus on your business.
If you are at a stage where you are clueless on what you should know when hiring a general contractor, below are the best practices to guide you on how to hire an outstanding commercial real estate general contractor.
- Ask for referrals. Business owners who have hired a general contractor in the past 1-2 years when relocating their businesses have a good grasp of what makes a general contractor excellent. Referrals also help keep you from making mistakes and you can gather tips or suggestions about your planned build out too. Finding out who you do not want to work with during the general contractor hiring process can narrow your choices and find you the best company for your build out.
- Do your research. It is possible for you to get multiple bids from different general contractors. Narrow them down by diligently looking into previous clients’ reviews or recommendations about the general contractor’s past work. Asking the right questions when deciding who to choose as your general contractor for your office space is part of doing your research. ‘Is your bid an estimate or fixed price? ‘How long have you been doing commercial real estate construction build outs?’, ‘How many city permits have you obtained in the past 1-2 years?’, ‘What type of challenges do you anticipate on this project?’ are some of the questions you can ask a general contractor for you to figure out if they are the right fit for the job.
- Perform Google Reviews. While doing your research, type in the name of the commercial real estate general contractor on Google and read the search results, including reviews. Type in their names and/or company name and the word “lawsuit” after it to see if there are ongoing or previous settlements. This will help in choosing a general contractor who is responsible and diligent with their job.
- Check for permits. General contractors should be licensed and have the right permits in order to start a construction build out on a commercial space. In addition, general contractors should know how to process city permits for your build out plan to get it executed. This will significantly decrease the amount of time spent on applying for city permit approval if the general contractor is already familiar with the process.
- Check for insurance. Ensure that the commercial real estate general contractor is properly insured. You can ask for a Certificate of Insurance (COI) which should provide the name of the insurance company, their policy number, and inclusions and limits the general contractor’s coverage has. To further guarantee that the general contractor is insured, you can verify that their policy is still in effect by contacting the insurance company directly. Working with an uninsured general contractor puts you and your business at risk. If any accidents or damages occur in the commercial space, you will be held liable for it. Prior to hiring your selected general contractor, you will need ask their company to add you to their insurance policy as an additional insured. Adding your business to the insurance policy as an additional insured is simple and free for the general contractor.
- Everything must be in writing. Securing a contract that has everything written on it will give you clarity and assurance about the construction work you hired the general contractor to do. Having a detailed contract that is signed by all involved parties before the build out construction begins gives you the guarantee that your expectations will be met. Details such as payment terms, the description and quality of work to be completed, the prices of services or items, any applicable guarantees, and estimated time frame from start to finish of the construction build out are essential information that should be included in a contract.
- Take your time. Lastly, do not rush into having your office, flex, retail, or warehouse space constructed. Taking your time to think and decide about who to hire for your commercial space construction build out is important. Making sound decisions that will affect the next several years of your business should not be taken lightly. Your office space will be your and your employees’ second home. Make sure that you will hire an excellent general contractor who you will be satisfied to work with.
What are the top 7 suggestions you should know about when hiring an architect for your commercial real estate office space build out?
If the general contractor is the builder, the architect is the designer. Architects draft and draw the plan and design of your commercial office space build out. Meeting with an architect regularly to draft your new office space is needed to ensure that the correct design is drawn for your new office before applying for a city permit to build the space. The architect will take into consideration the features and function that you want for your new office and will work with the general contractor to discuss how the design will be executed once permitted.
Now that you are ready to take the next step after finding the right office space for your business, what should you know about when hiring an architect for the build out? Below are the top 7 suggestions when you decide to hire an architect.
- Conduct interviews. When you decide to hire an architect, conducting interviews will be the first on your list. Interviewing several architects and asking the right questions can help create a clear perspective about the tenant construction build out you are about to begin. Asking questions such as, ‘What are the steps to the design process?’, ‘How much does the architect think the project will cost?’, ‘Has the architect worked on a similar project before?’, ‘How does the architect handle fees if there are change orders to the plans?’, ‘How long will it take for the drafting and designing of the commercial real estate space?’, and other questions you think that can benefit your business’ design process.
- Industry Specialization. Know what kind of architectural specialization the architectural firm is skilled at. Every architect is different; some specialize in industrial architecture, others specialize in urban designing, and some are experts in green building designs. Depending on your vision for your new commercial space, look for the kind of expertise you want your architect to have.
- Hire an architect that aims for sustainable designs. Making an effort to invest in sustainable and “build-it-once” designs that work well with built out commercial real estate buildings can help you save money on utilities and future build out projects. If you and your architect opt for “build-it-once” designs, it is also possible for the space to function more efficiently for your current and future business needs.
- Hire an insured architect. Just like commercial real estate general contractors, architects also have insurance. Check whether the architect you are about to hire is covered by insurance and guarantee accountability if anything happens before, during, or after the office construction build out process.
- Perform Google Business Reviews. When doing your research, type in the name of the architectural firm and/or the architect on Google and read what comes up including reviews. Type in their names and/or company name and the word “lawsuit” after it to see if there are ongoing or previous settlements. This is helpful if you want to know more about them before scheduling a walk through or interview.
- Schedule walk throughs. It is wise to schedule walk throughs wherein the architect or satisfied client will show you the architectural designs that were implemented in their commercial real estate office or warehouse space.
- Trust your instincts. Lastly, trust your instincts. After you have done your research and conducted multiple interviews, it is time for you to make the final decision of who you should hire for your tenant construction build out project. Consider the factors of who you feel you are most comfortable working with, who answered your questions best during the interview, and who is more aligned to your vision about the construction project. If you consider the factors, did research and asked the right questions, you will have confidence in your choice.
Is Handling the Tenant Construction Build Out for Your New Commercial Office Space the Right Choice?
Now that we discussed the things you should know about hiring a commercial real estate general contractor and suggestions when hiring an architect, the grand question is: Is handling your tenant construction build out the right decision for you and your business? It depends — It will depend on your priorities as a business owner. Do you want to prioritize managing the construction build out of your new commercial space, or do you want to spend your time and energy managing your business and making money?
As mentioned above, there are many things you have to take into consideration when hiring a commercial real estate general contractor and architect to design and build your new commercial office, flex, warehouse, or industrial space. Saving time, money, and stress are important factors for a busy business owner like you. If you decide on taking on the role of managing the construction build out yourself, these factors can be greatly affected, and your business might suffer.
Another option is to find a commercial real estate property management company that also handles tenant construction build outs.
Select Property Management Companies such as JW Management that Provide Outstanding General Contracting and Architectural Services for Commercial Space Build Outs.
Finding a commercial real estate property management company that handles general contracting and architectural services will save you time and money. Selected property management companies like JW Management offer general contracting and architectural services for free to their tenants. Most property management companies charge for these services with markups that usually range between 10-15%.
Property management companies like JW Management have vendors with whom they have been working for over 20 years to manage the construction build out of their commercial office spaces. Another reason why JW Management uses our own contractors is because we have tried and tested letting tenants handle their construction build out, and it always results in sloppy work and complaints about the project. We realized it is easier for our tenants to let us handle the construction build out project of their new commercial office space because it saves them time and money plus, they can focus on running their business.
The suggestions and best practices that we mentioned above are just the tip of the iceberg of how a commercial real estate construction build out process works. There are still many steps required when handling a tenant construction build out that you can read by clicking here.
Craig Wasilchak is the COO of JW Management Company is a Family-owned & operated Commercial Property Management & Leasing in the Dallas Fort Worth Metroplex. Craig is also an active member of the Entrepreneurs’ Organization, as he is the owner of a business earning over $1M in annual sales.
JW Management Company owns and operates multiple properties throughout the DFW Metroplex