Understanding the Value of Owner Representation
When your business faces the daunting task of strategic planning for its future physical facility needs, you can travel that road alone—or, you can enlist the services of outside professionals. Creating a strategic plan to expand, consolidate, relocate, acquire or sell real estate involves many moving parts and is fraught with risks if even one mistake is made. There are a number of critical components that require the expertise of many different professionals who have the experience required to make a good, comprehensive decision that results in the best solution for your needs.
The question becomes, who should you retain to help your business plan for its facility needs at the outset of the process, and then help to implement that plan as it moves forward? Certainly, there are many tangential players to potentially enlist—most notably, brokers, landlords, developers, attorneys, architects and accountants. But we believe that an exclusive owner representative, retained and compensated in such a manner as having only your best interest at heart, is the best play to call.
A true owner representative – without any bias or conflict of interest – provides the eyes and ears for your business from beginning to end of the process. Whether that process entails construction, purchasing, leasing or other tenancy arrangements, an owner rep should possess the requisite experience, expertise, insight, motivation and client service skills to ensure the best possible outcome for you and your business.
Real estate brokers, developers, general contractors, architects, engineers, specialized consultants and testing companies all provide essential and necessary services to complete the project. Attorneys and accountants will usually be trusted confidants and may have many years of loyal service. An owner rep serves you by providing the necessary project oversight, as well as coordination and controls to manage all the different players on the team. This includes helping you select and retain the best companies to fill the various roles in the project.
Whatever the size or requirement may be, real estate projects and transactions are complex affairs. There are so many big-picture issues that must be addressed early on, so many details to attend to at every stage, and so many questions that must be asked—for example:
- What are the driving forces dictated by your business’ needs: project schedule, quality or budget?
- Should your business own or lease its facility or facilities?
- Do you want/need to build a new facility or facilities?
- Can a renovated facility suffice? Or, should you stay right where you are and modernize?
- Does the project require certain expertise from the general contractor or architect, or can the field be expanded to a broader group of service providers?
- Should you go turnkey, design-build, or complete construction documents with an architect and bid the project out to general contractors for a fixed or guaranteed maximum price?
- If it’s a new construction project, where should you even locate the facility or facilities, and what governmental incentives are available to reduce the project costs?
As you might expect, different owner reps bring different skill sets to the table and offer value in different ways as a result. Our firm, Marcum LLP, is a CPA, business and financial advisory firm—we are truly a complete business partner. As a result, we have the internal resources necessary to view a real estate project through many different lenses.
For example, our accounting and auditing professionals can be brought in as needed to analyze the financial impacts of buying versus leasing versus staying put. Our information technology experts can offer insights and recommendations for IT strategies as they relate to a tenant’s various real estate options. We have valuation experts who can weigh in on different scenarios. Even our professional staffing and strategic marketing professionals can offer insight and advice as needed.
Most businesses do not want to have the services of their top management diverted from the company’s main purpose of running a successful operation. Planning, coordinating and managing a real estate development, construction/renovation project, or relocation/lease renewal project can consume the resources of a business. Many businesses will undertake a project of this nature maybe once every generation, and they appreciate not having to reinvent the wheel.
If you’re facing an upcoming real estate challenge, ask yourself if you have the in-house resources necessary to meet that challenge—and generate an unquestionable win in the process. If your answer falls anywhere short of an unequivocal yes, then we think it’s well worth your time to consider enlisting the services of an owner rep. Meet with several potential candidates; ask them to detail their expertise, their experience, their resources and their approach. Try to get a feel for how they think. Are they creative? Analytical? Do they embrace innovation? Do they stay abreast of the latest industry trends and issues? And finally, gauge how comfortable you might feel working with them. Hiring them as your owner’s rep is like hiring your team’s general manager. It’s a decision you want to get right.
A qualified owner’s rep ably serves as the singular point of contact who will always make project decisions with your best interest in mind and to whom you can obtain necessary information, guidance and representation to lead the team to a win.
Do you have questions about owner representation or other commercial real estate matters? Contact us at (855) MARCUM1.