I really liked my floorplan. Now I just needed to know how much it was going to cost me.
Here’s where we are starting out:
As you can see, this space is going to need a lot of work.
Before I could make an offer, I needed to know how much tenant improvements were going cost. I brought in the same 2 contractors I used last time for another estimate. I showed them my floorplan, and went over my requirements for plumbing, cabinetry, electrical, insulation, etc.
Both of them came back with their estimates about a week later, and they were very close to each other, at about $60/sf. The benefit of getting more than one estimate is that you can see how reliable the estimates are. If one contractor comes back much more expensive or cheaper than the other, you probably want to question both estimates. A lower estimate doesn’t necessarily make it a fairer deal. Sometimes, contractors remove certain line items or hidden fees to make it look like you’re getting a steal. In this scenario, you probably want to get estimates from one or two more different contractors as a tiebreaker. Fortunately for me, both contractors came in pretty close to each other, and I didn’t feel like I needed to get another estimate.
The main purpose of these estimates was to help me with my lease negotiations and to help me budget my contribution of the tenant improvements. I wasn’t necessarily going to hire any of these guys quite yet. Also, it was possible that the landlord might going to want me to use his own developer as a contingency for his tenant improvement contributions.
Now, onto negotiations!
I’m now 2 months into my search for office space, and I didn’t want to delay signing a lease any further. My last offer took about 2 weeks of back and forth with the landlord through my agent. I really didn’t want to deal with that again. Instead, I asked my agent to find out if the landlord would be interested in conducting negotiations in person, which would probably take only an hour. Turns out that the landlord actually appreciated my gesture, and had the same idea in mind. Often times, tenants and landlords use an agent as an intermediary to shield each party from any potential bad blood that might arise from direct negotiations. Personally, I would rather negotiate face to face, and risk things going sour. It would be a good opportunity for me to find out exactly what kind of person the landlord is, and vice versa. What’s the point in discovering that the landlord is a total slumlord AFTER you sign a lease? Better to get my hands a little dirty early on rather than to have a huge pile of trash fall on my head later.
So, the landlord and I, along with our subsequent agents, met. The meeting lasted 2 hours, not because we were in a heated battle, but because we digressed, and talked about other irrelevant topics. We actually got along pretty nicely. He seemed like a straightforward, no B.S., no games, kind of guy. He was as interested in quickly getting to the bottom line.
I’m not sure what the legal implications of disclosing the details of my final terms are, so I’m going to refrain from posting that information. I am, however, happy with my terms. I was given access to the premises to allow my contractor to begin tenant improvements on October 1. As I said previously, my first rent will be due in March.
Here’s the building where my office will be located: