“Developco led us to determine whether to build, lease or purchase a building for our updated training facility. They helped us locate, finance and then renovate an existing 23,000 SF property in Northglenn, Colorado. They assembled and managed a great design and construction team, all the FF&E, and delivered the project on time and under budget. We made a successful relocation because of this team.”
Marilyn Akers Stansbury, CEO
Client Need
Space too Small and of Poor Utility. IECRM’s existing 15,580 SF leased space was too small, had many deficiencies (excessive hallways, poor heating, a tired and utilitarian feel, low 7’6” ceiling height and few windows. IECRM desired to have the “largest electrical training facility in the United States”, comprising 25,000 SF, with materials and furnishing that were of high value but low cost.
Enhance the Experience. IECRM desired to upgrade its image, enhance its student’s experience, and to create a prototype training facility in Denver that could be duplicated across the US.
Seek Property Ownership. IECRM desired to lead the other 57 IEC Chapters across the US by purchasing and owning its own facility. There are significant advantages to owning.
Assignment Highlights
Developco, in tandem with Benchmark Commercial (CRE Brokers) discovered, toured and further investigated three (3) properties to purchase and four (4) properties to lease. For each property, Advisors created a renovation cost estimate. A general contractor and architect, led by Advisors, help analyze several lease and purchase alternatives.
Advisors created a Lease versus Purchase analysis showing the financial benefits of owning. IECRM was determined to find a property that it could purchase.
Advisors created a cost model to develop a new 25,000 SF building from the ground up allowing IECRM to determine that it could not afford to buy land and develop a new building.
Results
Advisors determined that by purchasing 11429 Pearl Street in Northglenn, CO, versus leasing another similar property, IECRM would save $100K each year.
GKA Architects reduced the square footage requirement without sacrificing functional qualities of the space.
With an owner mentality, decisions were made with best value in mind along with minimal maintenance. One example was that a new roof was installed instead of patching the existing. Finishes were chosen based on a higher quality/life expectancy.
The project was delivered to the client on schedule along and nearly $100,000 under budget.
Cost Savings
Advisors and Benchmark saved IECRM a combined $700K. Here are some highlights.
- After learning that the seller was very motivated to sell the property, a low-ball offer and property condition negotiations resulted in $350K savings over the previously reduced asking price.
- Convinced the municipality not to require a new site development plan and the installation of a storm water detention pond ($70K savings)
- Convinced the municipality not to require the required typical screen of mechanical units ($10K savings)
- Negotiated the final GMP (Gross Maximum Price) with General Contractor down through clarifications and additional subcontractor bids ($60K savings)
- Purchased lighting fixtures directly instead of through the GC ($25K savings)