32 years experience in commercial real estate transactions and development
Founder and Principal of The Mehigan Company, Inc., providing transaction management, project management, operating expense and project audits, database design, toolkit development and incentives recovery services
Clients range from small/mid-size companies (DASSE Design, Prange Law Group, PMC-Sierra) to Fortune 500 corporations (Cisco Systems, Apple, J.P. Morgan Chase, AT&T, The Clorox Company, McDonalds)
If the Transaction Management process is not intelligently organized at the outset, it becomes a space acquisition nightmare and is extremely difficult to undo. Senior Management must stake its claim in the project from Day 1 and invest its own time and energy into making thoughtful, well-informed decisions – not only about space, but also about vendors and design plans so as to gain leverage in negotiations and avoid significant cost overruns.
Timing is everything and not allowing enough of it can really hurt a company during the negotiation process.
Timing is also critical when coordinating a transaction with a lease expiration date. Don’t forget that holdover rates are usually 150% of the current rent amount. Once a space is selected, designed or built, and you realize too late that it’s the wrong site or the wrong design, it’s hard to backtrack. And if you have signed a 5- or 10-year lease, you’ll be living with and paying for this mistake for a long time! This can also have embarrassing repercussions on your company’s image and reputation.
If you haven’t discussed and signed off on critical criteria in advance, and do not have an appropriate, expert team or group of partners in place from the beginning of the Transaction Management process, you will most likely add confusion to accrued additional costs, not to mention a great deal of wasted time.
A well-managed transaction has a profound impact on company costs. When the transaction processes, planning and implementation are done well, this implies that a company has already conducted a comprehensive quantitative and qualitative analysis of its holdings and has a very informed, knowledgeable understanding of its needs. Real Estate Facilities and Services represent the 2nd highest cost on a corporate income statement; so managing this area well will have a significantly positive effect on a company’s expenses and bottom line.
A Transaction Management process that is fully aligned with the company’s corporate culture will make for a successful space acquisition.
All companies like to think that they can offer something unique in terms of a supportive and motivating work environment to their employees. One way to achieve this is by adhering to consistently high quality standards in design, processes and operations. This kind of consistency in quality goes beyond fostering a more productive work environment. It is also very tangible proof of a strong brand and a positive corporate culture, which by its very nature fosters pride and a sense of belonging.
Although the transaction management process is complex and rife with anxieties and tasks that are quite foreign to most employees, certain approaches can make the process much easier and less stressful: keeping to a schedule and time benchmarking achievements as you move forward; spacing out the various tasks and synchronizing all of the small and large decisions that need to be made, ensuring that there is enough space between them to come up for air.
With proper integration of team members, the Transaction Management process turns into a company-wide success. The space becomes a prototype for effective and efficient operations.
Just as they do with their personal homes, employees want their workspace to be a reflection of their own image. Creating this value-added identity and completing the transaction management project successfully is a branding event that everyone can be proud of and celebrate.