Assembling a Team to Get the Deal Done
Josh Siegelman June 19, 2013, 6 a.m.
There are many moving parts that must work seamlessly in order to push a tenant deal across the finish line. Sure, being a knowledgeable and persistent broker is one component of the equation, but assembling the right team of professionals is essential to completing a mutually executed deal.
As brokers, it is in our best interest to aid our clients in hiring the right professionals in order to be able to fully evaluate a space, close a lease and open the business. The architects, engineers, attorneys and expediters can make or break a deal just as easily as a broker uncovers the site and secures an agreement on business terms.
The architect is usually the first one in the door after a client takes a serious liking to a prospective space. His initial role here is to advise on whether the concept is feasible for the space and the necessary alterations, filing and time frame necessary to complete the job. Choosing the right architect is essential. First of all, if he cannot make the space work for the concept, in a reasonable time frame (before the expiration of negotiated concession), your deal is dead right off the bat. My suggestion is to establish relationships with several architects with good résumés. People enjoy the ability to get bids and hear a few different points of opinion. If your recommended firms are staffed with all trustworthy people, you’ll be in good hands.
Once the architect gives the go-ahead, it is time for the engineers to check on the functionality of the space. These can include specialists from fields including HVAC, venting, electrical, plumbing and possibly more, depending on the use and scope of work for the site. Each of these specialists is essential in determining a capital investment in the space and assessing the value of the deliverables within the premises. As a broker, there is value in creating a book of these professionals for a number of reasons.
Yes, they are necessary in producing a positive evaluation of the prospective space, but the greater picture is in referrals. You scratch their backs and they will scratch yours. Many of the tenant referrals I receive are built on recommendations from specialists who I have recommended to others in the past.
Now that business terms have been agreed upon and specialized professionals have given the job their okay, it is time for attorneys to enter the picture to finalize a lease agreement. Yes, the feeling is good—we are getting somewhere—but don’t start dancing yet. Attorneys are infamous for making or breaking a deal. At this point, many of the main business terms have been negotiated, but 20 to 60 additional pages of clauses leave plenty of room for argument and negotiation. The most important thing is finding an attorney who has the time to dedicate to the deal. Those prolonged periods of time negotiating are where deals go to die. It is essential to secure counsel who will put your deal toward the top of his priority list. I always like to suggest an attorney, but much of the time, when dealing with established clients, they already have someone with whom they feel comfortable.
Congratulations! A lease has been mutually signed, your client is happy, and your first commission check is probably due on signing. Relief has been found, but you’re not quite there yet. Expediters are among the final pieces of the puzzle. Much of the time, hired architects or attorneys have expediters they work with, but it is important to stay in the loop for at least a year from lease execution. A delay in permitting, a delay in construction or a delay in securing a liquor license can weigh heavily on the launch of the retail store/restaurant and that tenant’s immediate success. It is essential that these professionals take care of business to ensure that a proper time frame is kept. If a rent payment to ownership is delayed or the client tanks before the first year, you’re not seeing the remainder of your commission check. We do not always have control over these functions of the deal, but we should always try to help direct and keep tenant/landlord communication positive.
Assembling a team to get the job done is a necessary evil. The leasing and construction processes go hand in hand with broker responsibilities on a deal.