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Property Acquisition Mistake: Not Allowing Enough Time

A survey taken among members of the International Tenant Representative Alliance (ITRA Global) yielded surprising results: the number one mistake companies make in the facility acquisition process is NOT ALLOWING ENOUGH TIME.

 

Collectively, ITRA Global members have an average of 20+ years of tenant representation experience, advising international, national and local commercial tenants in hundreds of leases totalling millions of square feet. This vast experience has shown that facility research, property inspections and comparison analysis can usually be completed in a week or so by motivated companies already familiar with the local market. However, those tasks are only the first steps in a potentially long process. Assuming the space is not going to be occupied in as-is condition, which is possible but rare, several commonly overlooked complications should be factored into the relocation timeline:

 

Negotiations:

Negotiations of the basic business terms with the Landlord, preparation of the lease, and legal review/negotiation of the lease document can span weeks or months.

 

Construction Plans:

Architectural and engineering plans must be completed prior to applying for building permits, and finalising plans can easily take one to two months.

 

Permits:

Before renovations can begin, construction permits must be obtained. This will take additional months – and the duration of this process depends on the workload of the municipality and/or if the plans are returned because of technicalities - requiring revisions.

 

Renovations:

After the lease has been signed, the interior often needs renovation or refurbishment, which may require 1-2 additional months.

 

If existing acceptable facilities cannot be found, new construction can easily take nine months lease execution through receipt of a certificate of occupancy. Horror stories abound in the industry of it taking even longer - in some extreme cases.

 

 

Bottom line: USE AN EXPERIENCED PROFESSIONAL and allow a reasonable time frame of six months to one year when procuring new commercial facilities.

 

 

 

 

Article submitted by ITRA Global

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