Like a good quarterback can make-or-break a football team, a good project manager can greatly improve the logistics of an office build-out or renovation project, resulting in time and money saved. Generally, a good rule of thumb is that a successful project manager will save your company more on a project than the cost of their fees, which typically equate to 3% to 5% of the total cost of the project, depending on size and scope.
In this article, we outline four ways a project manager can help your company save money during an office build-out or renovation project.
1. Pre-construction Advice
It’s never too early to enlist the help of a project manager. Even if you are just beginning the search for new space, a project manager will be able to provide valuable guidance and insight to your team. This can result in making educated decisions that lead to a more streamlined experience and a better end result when it comes time to actually build out your office.
For example, project managers are experts on building codes and regulations that will affect your project. When considering different office spaces or land sites, they are able to use this knowledge to look for complications that might result in your project accumulating costly setbacks later on. These issues become increasingly expensive the later they are detected, so having a project manager that can bring them to the forefront during the decision-making process can lead to significant savings, both in terms of time and money.
2. Negotiating TIs
Most new leases include a Tenant Improvement (TI) Allowance, which is a budget provided by the landlord for tenants to customize a space to their needs. TI Allowances typically cover things like construction costs and necessary architectural and engineering fees. These will be specifically outlined in your lease document.
A project manager can add value to lease negotiations by providing preliminary project budgets. This will allow your broker to negotiate for the appropriate and commensurate TI Allowance. A large TI allowance allows your company to maximize its build-out without depleting the out-of-pocket budget that typically covers costs such as moving, furniture and data services (for which you are not normally allowed to use TI dollars).
3. Time Management
One of the most costly problems that a project can experience is a delay that causes a holdover on your current space, meaning that your company is not able to move out of your old office space by the lease termination date. Holdovers often result in fees totaling 150% to 200% of the monthly rental rate. The only alternative a company often has in this situation is to move out of its current space without a new space to occupy.
Both of these outcomes can cause significant setbacks and roadblocks, and it is a project manager’s full-time job to oversee the logistics of a project in order to keep the project on track. The earlier a project manager is involved, the better they can control the timeline and manage the overall schedule of a project.
In the planning stage, project managers build detailed timelines that set dates for deliverables and milestones throughout the duration of the project, along with assigning responsible parties for each task. A detailed schedule allows project managers to track progress and identify opportunities to avoid conflicts or setbacks.
4. Market Expertise and Budget Oversight
A project manager is your liaison to the market. They are familiar with market rates for every component of an office build-out and will use their knowledge and relationships to help your company maximize value throughout the project. This can mean ensuring that proposed rates for work are competitive with market rates and that the selected vendors and contractors will provide quality work. This expertise will help you get the most bang for your buck throughout the project.
In a perfect world, every desired fixture, finish and renovation would fit into your budget. While this is rarely the case, a project manager is able to optimize your budget and achieve the overall desired effect of your project. Often times, this comes in the form of advising where to cut costs and value engineer solutions that will work, like using plastic laminate countertops in a copier room, while allocating more of the budget to client-facing spaces such as conference rooms and offices, where you might use solid surfaces.
The value of an effective project manager is hard to measure. From helping your company choose the proper space, to managing the logistics throughout the build, a project manager is able to serve as an advocate for your company’s interests at all stages.
Outside of looking for direct ways to save money on a project, a project manager will help your company transition into a new space without sacrificing your dedication to the operation of your business.
To continue learning about how a project manager can help you, read our Ultimate Guide to Hiring a Project Manager.