I headed up to Washington, D.C. last week for a new assignment. The trip was for a family office client I have who pulls me in from time to time. For over 20 years I have consulted on wide-ranging topics for them. Everything from warehouse consolidation projects to finding office space on Capitol Hill.
I’m not an expert on office space on Capitol Hill. This client doesn’t call me to get my day-to-day opinion on the local market. This is consulting – I help clients get clarity on their vision for the project. I ask great questions and help the client remain focused on what’s important to them so that the project gets executed. I manage the details and act as an advocate for the client as if I am a temporary in-house real estate manager.
The Washington, D.C. real estate market is hot. Class A office space is leasing for around $80 a square foot, and finding an office to purchase is tough. Washington’s Class B office buildings have all been stripped down to their superstructures and converted to edgy “Class A” space where cool companies such as Google and Samsung land. Old Class C office buildings in the right location may cost $500 to $1,000 per square foot, plus you can expect to put in another $250-to-$750 per square foot in improvements. Because of the abundant historic designations throughout the city, the entitlement processes can be longer than 18 months.
This type of work reminds me of when I was working for Heitman in New York City and Boston, when we were trying to develop Class A distribution buildings close to John F. Kennedy International and Boston Logan International airports. The team spent millions of dollars in consultant fees and options before we were even able to close on the property. Millions of dollars were spent in many years before we had control of the property, and that was at a time when things were going smoothly.
The complexity of obtaining approvals from bureaucratic regulators is common in all mature markets. I predict that it is only going to become more common in Charlotte. The City’s Planning Department and the Building Standards Department will become more powerful. The result will be that their approval processes will be more onerous.
Handling these kinds of complex deals isn’t for everyone, but it’s something I thrive with, and I have the tools in place to handle these projects. One tool is my Prepare to Win-Win Negotiation worksheet. Download a free copy here.
In a situation such as the one I’m working on now, I’ll advise my client on which local expert to hire who assists with the on-the-street detail. I’ll send out RFPs, meet with the local brokers and have them present to us, and then help the owner make the decision on who’s the best to hire. With my Family Office client, we’ve hired Avison Young to work with us. Throughout the project, I will stay on as the voice of the owner, which lets my clients stay focused on their businesses while feeling confident their real estate needs are being taken care of as they need to be.
A great way to learn about what a consultant does, versus a traditional broker, is to visit The Counselors of Real Estate website. I am proud of my CRE designation, which is an honor held by few of the millions of real estate practitioners worldwide. One has to be nominated to obtain the designation and then must meet rigorous qualifications, including being accomplished and highly regarded for integrity, ethics, judgment, leadership, knowledge, and superior expertise in his or her organization and/or field(s) of specialty. These professionals are called upon to provide some of the most intense and rigorous analysis.
Do you need a consultant for a complex real estate deal? Get in touch. I’d love to learn more.