Owner’s Representatives: The Value to Tenants and Landlords
Owner representatives are customarily utilized on large development or construction projects, but smaller interior improvement projects also benefit from some level of representation by a party looking out for the owner’s (or tenant’s) interests; like Real Projectives® (RPL). After all the architect/designer does not usually provide 100% of the scope of work nor does the general contractor. In order to infill the areas not covered by them, an owner’s representative provides needed coordination and synchronization. Both landlords and tenants benefit in several ways from dedicated representative services.
Representation Services
The terminology, applications, and achieved benefits of engaging third-party owner’s/tenant’s representatives has steadily grown in all segments of the construction industry especially given the current complicated supply chain challenges. The ‘basic’ scope of services assigned to the owner’s representative centers on project management, coordination, facilitation, oversight, value engineering, and monitoring during the design, procurement, and construction phases of a project. Given RPL’s frequent partnership on the client’s side of the project table, we have a significant and direct impact on the success of a project.
Next are two specific areas where owner representatives often make a difference.
Wisely Managing Tenant’s Allowance
Case in point, from the tenant’s perspective. Under many leases, a tenant is given an allowance by the landlord for the renovations; say $30-$40 per square foot as an example. However, who pays soft costs for architect or engineer, and the permit fees. There are also security/access issues, video surveillance, point-of-sale system integration costs in addition to the construction. RPL manages all this including furniture, fixture, and equipment (FF&E) procurement, installation, and commissioning to deliver a completed project.
Conversely, concerning the owner leasing space to a tenant. A landlord gives an allowance, but is all that money going into the construction and enhancing the property as intended? Savvy tenants can spend the money on design or operating costs, cheapening the improvements that may or may not be permitted under the terms of the lease. RPL monitors the progress and coordinates the tenant’s systems with the building systems. After all, built-in improvements stay with the property when a tenant vacates, coordination is necessary, or all the improvements are wasted.
Adding Capacity for Building Owners and Property Managers
In a world where building owners/operators rarely have the bandwidth to manage everything that arises during a tenant’s buildout or tenant improvement project in addition to their regular operational responsibilities, the owner’s representative is an independent consultant that extends the capabilities and capacity of each client. By hiring RPL as your representative, you gain decades of experience allowing you to concentrate of running other aspects of your business, while having peace at mind knowing that you are in good hands. And owners often don’t have the time, or may lack the expertise and experience, to sufficiently monitor the team and make all the timely and technical decisions a project requires from conception to completion.
Clients must consider whether their internal capabilities and resources can successfully manage the process and realize that the additional investment into an owner’s representative provides a value-added service, creating a positive impact on the schedule, cost, and/or quality of the project and reputation of the parties.
If you’re looking to better manage your tenant allowance or add capacity to manage a tenant’s buildout or improvement project, we’d love to discuss the risks and options to help you overcome some of the challenges. Contact us today or call us at 888.357.7342 to discuss how leveraging our knowledge, expertise, and ambition could drive your next project or portfolio to success.
