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— Property Management Quarterly — April 2016
W
hen seeking a construction
company for a project of
any size, in-depth research
should be done and impor-
tant factors should be con-
sidered before committing.
Capacity.
First, a property manager
should look for capacity; it is helpful
to know how busy a general contrac-
tor is before engag-
ing in a partnership.
Many general con-
tractors, especially
the larger ones, will
have the ability to
produce a capacity
chart showing the
amount of resourc-
es they currently
have committed to
projects during a
specific time frame
(fiscal quarter, year-
ly, etc.). A reputable
general contractor
will only commit
to work if he knows he has the ability
to provide adequate resources for the
project.
Personnel.
Property managers will
want to choose a company that has
the correct personnel to put forward.
It is important that a manager feels
comfortable with the construction
team working on the project. If a
construction team is not clear on
its specific tasks, or cannot work
together as a unit, it is a warning sign
for the future of the project. A general
contractor’s employees are his most
important resource, so it is important
to make sure a project has the right
people for the job and that there is a
sense of unity among the team.
Alignment.
Managers should think
about a general contractor’s overall
project approach, culture, goals and
matched expectations. Ultimately this
engagement is a complex business
relationship over a length of time, so
seeing eye to eye is imperative. For
example, if your company values and
has an expectation of sustainability,
then selecting a general contractor
with a LEED accredited staff with
experience in green building would be
worth seeking out.
Billing.
A valuable point to note
when negotiating with a general
contractor is to fully understand at
what point the commitment is made
and when the billing begins. A gen-
eral contractor may provide precon-
struction services at different rates
depending on the situation. However,
if it is the only contractor on record, it
may defer billing for preconstruction
services until the start of construc-
tion. It is always best that property
managers go through the negotiat-
ing process so that the construction
company can assist to the best of its
abilities.
Planning.
Lastly, a great tenant
improvement project can be derailed
before it even breaks ground with
hasty or shallow construction efforts.
Our success in this department
comes from engaging with the owner,
the designer and any other key team
members at the earliest possible
point, ensuring everyone is looking at
the project from the same angle and
feels comfortable exchanging ideas
freely. It is important that managers
hire a general contractor early on in
the planning stages of a project; they
are in the business of managing time
and resources and can help set realis-
tic expectations for project duration.
s
Lou Jahde
Founder and
chairman of the
board, Palace
Construction,
Denver
Photo courtesy Palace Construction
A general contractor’s employees are his most important resource, so it is important to make sure a project has the right people for the
job and that there is a sense of unity among the team.
