Tales from the Field: What to Do with the Inheritance


Last week I shared a special story with you–the first in a five-part “Tales from the Field” series of lessons I’ve learned while on the job. While last week’s anecdote focused on what to do to make a project successful, this week’s challenge takes the opposite spin, serving as a cautionary tale.

SEE ALSO: A Kumbaya Moment for Pre-Planning Landlords With Tenants

Normally when one hears the term “inheritance,” it has a positive connotation. One imagines suddenly coming into a sum of money or being handed down a beloved childhood home. Not so fast! What happens if the inheritance is an office space that was already built by someone else…and not to the needs or specifications of your client or firm? That’s the exact scenario I’m about to lead you through in the hopes that it will give you some insight into what you should think about, if you have the opportunity to do so in advance.

The company in question worked with another firm to design a three-floor office space. They had only occupied it for one year when we got a call asking for some help. They wanted to sublet one full floor of their space–and fast. So, what was the client’s challenge? They needed to maintain certain portions of that space since it was connected both physically and technologically to the other two floors they occupied. There was no simple way to get around this complex issue. If two tenants have claim to a single floor, it needs to be resolved legally, meaning technical divisions would need to be put in place outlining fire and egress points. The tenant is under obligation to create fire-rated partitions for it to become a legal two-tenant floor.

This scenario was something the previous single tenant could not have anticipated. Now, they were scrambling to do the necessary legal work to remedy the situation and deal with the costs, financially and time-wise, to sublease the space. Such work, after the fact, takes away from the profitability that can be had from subleasing. In many cases, you can pre-plan a multi-floor office to remedy the situation and make it easier for someone else to inherit that space. Our advice to the client was to take great strides to make this work and then–and here’s the the important piece–to plan for what could happen in the next 10 years should another sublease scenario occur. (That also would have been our suggestion if we had built out the original space for this firm rather than inheriting it.)

The moral of this particular tale from the field is easy to see: before you occupy a space, think through what your exit and subleasing strategy would be, even if there’s only a small potential of that occurring. True, creating a few demising walls or thinking through placement of technology and electrical during the programming phase adds a little more to the initial overall budget. However, it is still a significant cost savings over adding it in as a “day two” item, especially when there are occupants to work around. A little thought today can save a whole lot of grief tomorrow!

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.