Most Common Mistakes to Avoid in Your Real Estate Project

8. Ignore the signs

When most people start out looking for office space, they tend to ignore the high asking prices or upper-priced deals, instead setting their expectations based on the lowest priced buildings or deals they’ve heard about. The marketplace is both dynamic and highly transparent; it’s a mistake to think that the higher priced deals in the market were an anomaly. Landlords talk to one another and each want to achieve the highest/best possible terms – often to the detriment of your company.

7. DIY

With so much gained or lost with the right or wrong space, both financially and culturally, business owners tend to want to do-it-themselves. Most often, they believe that their efforts to lease space without the help of a professional will yield financial savings, but an experienced professional can be a really important resource in navigating the various stages of an office lease and the ensuing project phases (legal, planning, approvals, construction, etc).

6. “Don’t Let the Door Hit You On The Way Out”

Very few companies take the time to dust off the lease for their current space to review the commitments they made 10 years ago. Most leases are stacked with promises that go unnoticed until it’s too late. In what condition do you need to give back the space? What happens if the company stays 1 day past the lease term? Have there been any overbillings, especially in the arcane area called “Escalations”? When do I get my security deposit back? Landlords won’t have any mercy when it comes to Tenants who are on their way out. No one hires an attorney to look at these issues. Who will be proactive about it?

5. “Better Late Than Never”

Whoever said “Better late than never” shouldn’t be in charge of your next office project. One of the most costly mistakes to companies is mismanaging the amount of time needed to plan their move. When a company underestimates the amount of time needed to plan, bid out, and execute a project, they will often squander valuable free rent time. Others wait until a lease is signed before starting their drawings, missing an opportunity to get a head start on the project before the lease even begins.

4. The Goldilocks effect

New York City building owners are notorious for having faulty tape measures. Most people are blown away by the shenanigans that Landlords call “loss factor.” Before relying on your old lease to dictate your needs, or using an approximate measurement of square feet per person, it’s best to map out your needs in detail. Loss factors, growth, density, and circulation will all play a role in arriving at the right size space – getting it “just right.”

3. Clicking the “I Agree” button

Office leases are stocked with language that give landlords a sledgehammer to whack their tenants a million different ways. The “What-If’s” can be dizzying to process. Hiring the right attorney is critical to filtering and limiting the potential scenarios that can play out. Beyond having an experienced attorney, a broker that engages deeply in the legal document is a must-have. A good broker holds the most command of the interplay between the business terms and the legal document and is motivated to find common ground between the parties.

2. It’s Hot and It’s Cold

You’ve just spent over a year planning, building, and paying for new space. After all that, wouldn’t it be nice if you never felt discomfort in your new space due to poorly designed heating/cooling systems? Every building has its own set up, with different ways of providing air-conditioning and heating. Best to get educated on how this impacts you. Most people hire the engineer last. The broker and attorney you hired didn’t roll up their sleeves to figure out what your needs are and how well they are being met.

1. “This is costing us more than we thought it would”

Building out a commercial space can be a very costly undertaking. Most decision-makers fail to properly budget for all the costs of moving their offices. Professional fees, construction, furniture, and wiring have all been known to spiral out of control. How can you reliably budget the right amount so that this doesn’t become a money pit? This requires proper planning, discussion, and research. Often times, the folks encouraging you to move are the very ones who profit from this decision.