Tales From the Field: Do Your Due Diligence

Welcome to the first of what will be a five-part series called “Tales from the Field.” Starting this week, and for the four that follow, I’ll share real world scenarios and their solutions, all of which will include a lesson learned—often a transformative one. By that I mean it can make, or break, a deal. Though I won’t name names, each will feel familiar to you as it will be a situation you or someone you know may have encountered out in the field or one you could easily imagine running into someday.

This week’s piece is all about due diligence. Let me paint the picture: My client was looking to lease upward of 90,000 square feet on three floors of a Class A Park Avenue building. In working with them, we did what we usually do and assessed the present condition of the space. While we were doing our due diligence, we discovered that one of the three floors had a serious issue in the old installation: The concrete slab was not level. Now, I know that many Manhattan buildings have variances for this and that there is a certain level of tolerance when it comes to what’s acceptable and “level enough,” but this definitely fell outside of those boundaries. We had a major issue on our hands, as well as an opportunity.

Armed with this information, we were able to take it to the next level in the negotiations process, use the flooring issue as a tool for the broker to negotiate with the landlord and ultimately have them assume the responsibility of leveling the floor out. The cost associated with doing so was significant, and we and our team did not want to see that burden land on the tenant. The dollar savings were tremendous, as the floor would have affected numerous aspects of the design, including walls, glass and furniture systems, Essentially, if left uncorrected, we would have had to compensate by designing around the floors, facing potential change orders and delays along the way. Since the lease was completed before the demolition and construction began, we were able to work out all of the details to the satisfaction of the broker and the tenant.

So what’s the moral of the story? As I’ve mentioned in previous columns, it always pays to survey the existing conditions and do your due diligence. The time invested early often saves time later—and maybe some serious dollars. Discovering the floor issue was a key piece of the puzzle and could have been a major inconvenience—or even a deal-breaker—to our client, who, by the way, along with the broker on this deal, is still a client and friend of mine today.


Scott E. Spector, AIA, is a principal at Spector Group, one of New York’s premier architecture and interior design firms and a leader in corporate tenant and building owner-based design. The award-winning company has affiliate offices nationally and internationally. To date, it has completed more than 1,500 projects.

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