Disciplined | Reliable | Honest


Look, we tried to steer them away from the cliff, but sometimes the pull of cheap is just too strong. Ouch…

“My business was growing at a quick rate, and I needed a larger space to run our marine composites and manufacturing operations. We had considered using Pivotals’ project management and relocation services to help with the build out and prep of the industrial space, and our subsequent relocation, but as business life goes, we felt we would have the time and capacity to attend to these needs with our own team. In reality, we learned the value of Pivotal’s services the painful way. The buildout process consumed MUCH more of my time than I expected or had to give, and we somehow busted our relocation budget by $100k. My guys were tied up meeting production and repair schedules for customers, so we adopted the ‘whatever it takes’ approach to the relocation. In hindsight and foresight, I will never try to relocate my business again without engaging a Project Management group like Pivotal—worth every penny, and we didn’t use them!”

—R. Fleming, Fleming Marine Composites

Convenient if you can afford it? Or simply the cost of doing business…

Have you ever bought a tool or resource to fix a problem, only to find it takes you twice as long or costs you twice as much to complete? Ever consider it might be because the tool or resource you used was simply ‘convenient’ or a cheap fix? Let’s scale that…

One hard lesson I think we have all learned in business is that you get what you pay for (even if you didn’t pay for it). So goes the hard lesson in commercial real estate projects. What am I talking about? Simple—it’s the very common assumption that certain costs are ‘hard wired’ into a commercial real estate project, and simply unavoidable, vs. ‘convenience costs’ that are viewed as a nice Cadillac service if you’ve got some extra coin to afford ‘em.

Land or property purchase? Sure, it’s negotiable, but you’ve actually got to put some money out there to buy it. Property taxes? We’d highly suggest you consider those as part of the deal. Broker fees, attorney fees, architect and engineering fees, permit fees, contractor fees, all relevant and all are critical (please don’t skip the attorneys’ fees—there’s a reason they are so expensive).

But I’m willing to bet once you’ve looked at your overall project line item budgets (and see that the square peg does not fit the round hole), the Project Management expenses, or even yet, Relocation Management expenses are the first to see the guillotine—am I right? For many, they may not have wound up on the line item budget in the first place, or, an idea popped up to give the office ‘go-getter’ a real opportunity to prove themselves, yeah?

We can easily state that our #1 competitor is… the Client themselves! Unfortunately, we can also state that the best non-Client referral resource is the business owner who tried to save the budget by doing it themselves or clipped their own wings by clipping the Project Manager from the budget.

Before this walks off in the wrong direction, I’d like to clarify something—by no means are we so arrogant or ignorant to state that every commercial real estate development project, tenant improvement, or commercial relocation project requires Pivotal’s services. They don’t. At Pivotal, we take deep pride in our principals of Disciplined/Reliable/Honest. Our integrity is founded in honesty. If we don’t fit, or if we cannot provide immense value to your project and business, we will tell you so.

That being said, we will always point you in the right direction if we are not a fit, and cannot add value.

Pivotal Project Management can readily demonstrate how we have paid for ourselves, and then some, with every client engagement we have taken on. Commercial real estate projects are large investments for a business and including Pivotal Project Management in your overall plan and team is simply adding a return on investment partner.

The ‘successful formula’ in commercial real estate projects is quite simple. It boils down to experience, time, and money. Set the numbers aside for a moment and realistically ask yourself—

  • Do you have the experience? This is not a simple bathroom remodel, the learning curve is very steep, the commitment is heavy, and the consequences are harsh…
  • Do you have the time? No seriously, do you have the time to afford, and is that the best use of your time? Do your Clients feel the same?
  • Do you have the money? We’re not talking about you or your business’ financial stability, we’re talking about the money needed to recover from lack of time or experience

Hiring a professional Owners Rep and Project Management firm like Pivotal is a savings tactic—not a budget sacrifice or a nice convenience if there’s a slush fund. Is your development, facility, or tenant improvement plan blowing the budget? An experienced Owners Rep can identify critical course and options to succeed. Are your General Contractor fees coming in out of line? Getting 3 bids will not correct that—an experienced Project Management firm will. Think your relocation savings comes down to the lowest-cost mover? Check out our 99:1 ratio blog and let me know if you are willing to bet cheap on your future.

In short (yeah, this is long)—it’s time to understand that the value of an Owners Rep, Project Management, and Relocation Management firm like Pivotal is not just a nice convenience, it’s simply the best tool in the business to build a successful business.

Disciplined | Reliable | Honest

Nearly 99% of a business’s overall real estate project budget (in both time and money resource) is spent upon identifying a preferred location, negotiating a lease or purchase transaction, construction costs, and furniture expenses.

99:1 Dilemma and relocation managementBusiness leaders know that time, money, and the time value of money matter, and accordingly they tend to put their best and brightest resources upon negotiating financially critical leases, or, buy/sell transactions. Heck, why not? These are big dollars with big consequences and if you don’t have your best team of Attorneys, Bankers, Brokers, and advisors ready at the helm, you can cripple your business or business units for years to come. Aside from payroll and benefits, rents and mortgage expenses continue to present a growing dominance in overhead expense ratios – the numbers certainly matter.

But what about that other 1%? Where does that piece of the budget and attention go?  This area of 1% falls into the 99:1 vs 1:99 dilemma and where to reduce your risk and expenses.

If it’s not consumed by unexpected cost overages along the way, then unfortunately what’s left to handle, perhaps the greatest point of risk upon the business after all, is the occupancy phase: relocation management of people, IT, equipment, records, and resources.

During lease negotiations and construction buildout, 99% of the project budget is at risk, while only about 1% of the overall business itself is exposed to risk. On the flip side, during the final phases of a project (the relocation and occupancy phase), 99% of the business is truly at risk, while only 1% of the projected overall budget rides the line. How do we mean? Simple – lease negotiations and construction activities have large dollars attached, but they can take several months if not year(s) to arrange and complete. The business remains in motion, serving its customers, managing orders and delivery of products, goods, and services, and protecting its brand and position in the market along the way.

relocation managementWhen it comes time to ready the team and the company to relocate, do not dismiss the level of risk in this phase. You are fully exposing the business, your employees, your customers, and your brand to risk. If your internet circuit is not up in time, you can lose all inbound/outbound communications. If your construction schedule blows up and the certificate of occupancy is delayed, this can domino into your relocation vendors; they may not have the availability or capacity to make such adjustments at the last minute. Most commercial relocations involve 8-10 different external vendors to coordinate, and anywhere from 15-50 internal vendors to communicate and coordinate with regarding the change of service location. The occupancy phase and relocation management is critically dependent upon a multitude of things lining up just right, in the right order, at just the right time.

So what happens – you spend more money? Actually, No. There are ways to keep this from happening. First and foremost, do not underestimate the gravity of the tasks ahead of you. If you’re thinking or asking yourself How Difficult Could It Be? A commercial relocation is poised to show you that answer.

Regardless of whether you employ professional relocation management services, or attempt to take this on internally, you must dedicate capable people; and most importantly, those persons must have the time capacity to remain committed to the deliverables and outcomes. This specific phase becomes a challenge to most businesses, since its tough to predict one’s capacity, availability, or priorities as the relocation approaches. Some further points that will help reduce your risk exposure include:

  • Start planning much earlier than you think necessary – Do not put off the relocation planning until you know when you’ll achieve a certificate of occupancy
  • Contact your internet service provider at least 6 months out from projected relocation dates. Confirm the ISP provides (not can/ or may be able to provide) service for you at your new location. If new service installation is required, this can take an additional 3-6 months to establish along with their current 6 month wait period. Then, watch your updates like a hawk (sorry to say, but this one requires acute attention). Maintain continual update on status with your ISP provider on ‘turn up’, and have the service turned on at your new location at least a week ahead of your relocation. The time will still be crunched.
  • Evaluate your existing vendor relationships. Some existing vendors (IT, MSP, or ‘handyman’ services, by example) may not have the skillset or team capacity to properly address your needs during this critical event. During the relocation is not the time to ‘figure this out’.
  • Internal communications about the upcoming relocation and plan is critical (it prevents fear, damaging rumors, speculation, and ‘rogue’ plans), and limit the communication to only the critical points, dates, and responsibilities.
  • Relocation management is not a democracy. This sounds a bit rough, but trying to bring a democratic or ‘manage by consensus’ process to a commercial relocation is a recipe for disaster.

We think it goes without saying that every Business and Client would like a seamless and painless commercial transaction. Whether that be a lease renewal, an expansion, a brand new lease, a buy/sell transaction, or some combination thereof. Finish that experience on a high note, don’t let a commercial relocation sour a great new start!

If you would like to review your plan with us, or, you would like more info specific to your relocation, feel free to contact us. Our team is happy to discuss with no obligation.

Have a Client headed for a relocation? Give us 15 minutes of your time and we’ll make sure you’ve got them pointed in the right direction and paying attention to the critical risks. We want your Client to finish your deal on a high note. www.pivotalstrength.com