It is extremely rare that a commercial real estate space will give a business exactly what it wants without alterations, so companies frequently have to make changes after leasing a property. Developing a project budget is essential to completing that task efficiently, so the organization doesn’t spend too much.
The problem is that these budgets create financial limitations that restrict how much the business can improve the space. This guide will walk you through the project budgeting process and provide tips on how to get the most for your money.
What a Commercial Real Estate Project Budget Covers
Every commercial real estate project is different, as much of it comes down to how much work the space requires to meet the business’s needs. Of course, the budget often limits how much work the company can do, so concessions are often necessary.
The budget will usually provide a broad overview of what the business can spend on office renovations, expansions, alterations, and upgrades within the building. A CRE project can also include the initial contract negotiations and other tenant-representation services the company requires.
Commercial Real Estate Project Examples
The term “commercial real estate project” is quite broad and can extend into many different jobs the business requires before and after moving into an office space. Examples of CRE projects include:
- Tenant Representation
One of the first jobs a business will require regarding commercial real estate is tenant representation. The gist is that the company will hire a firm to find adequate space, handle the paperwork, negotiate lease terms, and manage the contract afterward. This type of project might not cause visible changes within a business, but it’s crucial when securing and maintaining the right location.
- Office Renovation Planning
When a particular office space isn’t right for the occupant, the business will likely plan a renovation. Carefully planning out what needs to happen within the building for the tenant to be happy requires a lot of work and insight.
- Oversight of Office Renovations
The actual renovations will also require supervision once the planning phase is complete.
This project could lead to a partial office shutdown while crews work on the building, all of which will require some preparation. Thoroughly overseeing this job also ensures the renovations meet the business’s vision.
- Planning a Relocation
A business might have to relocate to a new office or retail space when the current building isn’t cutting it. This project takes a significant amount of planning and involves finding a new space, negotiating the contract, and coordinating the move with as little disruption as possible.
- Interior design
Interior design is an essential part of any office or workspace because it helps keep employees comfortable. This concept can include aesthetics throughout the office, in addition to furniture, flow, and making the best use of the available space.
These jobs are essential to a company’s overall happiness within a space, and businesses will want to take each of them seriously. These jobs will also require a carefully planned budget, determining how large or small each project gets.
6 Tips for Getting the Most From Your CRE Project Budget
Businesses won’t want to cut any corners when developing a commercial real estate project budget. At the same time, saving money wherever possible is good for the organization’s bottom line. Tips for getting the most from your budget include:
1. Staying Realistic
Aspiring to have a grand office with state-of-the-art equipment and luxury furniture isn’t necessarily a bad thing. It isn’t helping the process, however, if it doesn’t fit into your budget. Keeping realistic goals ensures that you don’t get carried away trying to achieve too much with the money your company has available.
2. Shopping Around
It is wise to shop between service providers to see who can best meet your demands once you have a budget in place. Construction firms and interior designers will all have different rates, and you can use this information as leverage as you negotiate. Be prepared to walk away from a service provider if you don’t feel that it’s offering enough for the money you’re willing to put up.
3. Negotiating concessions
Perhaps the best way to get the most from your project budgeting is to negotiate some of the necessary work into your lease.
A landlord who really wants you in the space is more likely to pay for some of the renovations or interior design. Negotiating a deal like that can save money that might be needed for future projects.
4. Being Creative
Sometimes a company doesn’t have enough money in the budget to completely retrofit a building, and the landlord isn’t willing to concede. Some creative thinking about the existing space can work wonders in such situations – effective interior design can make a space appear much closer to what you want for less money than a renovation.
5. Auditing the Lease
Keep an eye on any changes that occur in the lease to ensure you aren’t on the hook for additional projects within the space. You should be aware when a landlord tries to sneak in a clause saying your company must handle some maintenance or repairs that could eat into your project budget in the future.
6. Getting Help
A company can handle all these jobs internally, but it’s a lot of work and generally isn’t advisable. Hiring a professional firm can remove much of the guesswork, ensuring you’re getting the most from your project budget.
Applying these tips will require you to be proactive because the process begins before you even choose a property or sign a lease. The result, if you follow the advice above, should be a space you and your employees love at a price you can handle.
Get Assistance With Your Real Estate Project Budget in DC
Sometimes your company needs an expert who has managed hundreds of real estate project budgets and knows precisely how to negotiate the best concessions and rates. The Genau Group has a veteran team of commercial real estate project managers in Washington DC, and we can take on much of this planning work for you, freeing you to focus on your business’s success.
Please contact us for answers to your CRE project budgeting questions today.