Speaker 1 (00:00):
Hey, welcome back to the K-Cup episode 30. Today we’re gonna talk about a familiar subject that we like to talk about, because we know that there’s a lot of opportunity there, and that’s ways that a GC can collaborate with a commercial real estate professional to close more deals. And today we’re gonna talk about three specific ways that we can, a GC can really bring, you know, serious value to a commercial real estate, uh, just their practice, and then obviously to, to, you know, put deals together. So we’re gonna jump into that. Uh, welcome back to the K-Cup. We’re glad you’re here. Uh, episode 30, we’re rolling on. We’re gonna, we’re heading towards that 50 mark as our next milestone, so we got that in our sites. And, uh, we’re excited about today’s show. So we’re glad you’re here and we’re gonna dive in, John. So let’s talk about these three ways that, um, that we as general contractors can add value and, and actually help commercial real estate brokers close more deals. So stayed tuned general contractors Baton Rouge for these great tips for collaborating with CRE pros.
Speaker 1 (00:59):
And, uh, this first way is what we like to call the pre-lease due diligence and feasibility analysis. That’s kind of how we package what we can do. And it really consists of three, three things, three steps. One, we can walk spaces before A-A-C-R-E. Uh, you know, pro has a client that’s, you know, either committed to a space or shown interest to a space, but we can go with them. Like, say they have a client in mind and they, and or they have a client and they have a space in mind that would fit that client before they even show the client that space. They can call us and we can go and do this feasibility walkthrough with them. We can help them assess the space so that they know how to present, you know, it it the space in the best light to their potential client to hopefully, you know, be, uh, you know, have a higher likelihood of closing the deal.
Speaker 1 (01:52):
So what we would do in that walkthrough is that we, we would want to assess things like mechanical systems, uh, look at, you know, the electrical system, make sure that, you know, it looks like it meets code or EV or, and everything. And then we’d be looking for, you know, anything that jumps out as like a code violation, maybe something that’s not a DA, you know, uh, standard or whatever. And, um, anyways, anything that, uh, also would be a structural limitation. Like say they need a certain type of space or they need a, a loft or something like that. We’d have to be able to assess real quick whether or not they would be able to pull that off in that space. Uh, the next, the next thing that we can do is that we can provide ballpark construction costs during, you know, what we call the tour phase, when, when, uh, you know, we’re walking through that space with a tenant and obviously the agent. And hopefully the general contractors Baton Rouge are getting these great tips.
Speaker 1 (02:48):
And, uh, we can actually like, ballpark some things for ’em right there and give ’em an idea. Well, we know based on a job that we did, similar list that, you know, to, to do what you’re looking at here might be in the neighborhood of, of x, you know, something like that. Yeah. And, uh, and then the other thing is, is that we can help identify hidden costs of a space if, like, say A-A-C-R-E Pro has a space that they’ve just ta taken as a listing and they’re wanting to lease it out. So now they’re, they’re serving that listing client, but also, you know, they wanna bring, obviously, potential leases for the space. We want to be able to help them identify the hidden costs that they can, uh, disclose to a potential client so that, you know, they don’t get this client and get the paperwork done and all that, and think that they got a hot deal and then, and then they find out, oh, the thing’s full, it’s, it’s gotta be abated for asbestos. Or, you know, something like that. It has to have a, a, you know, $20,000 in a DA upgrades or, you know, a $50,000 ramp out front. Like, I know you, I know you’re involved in some really expensive ramp on time for to meet a DA for a company. So
Speaker 2 (03:58):
Yeah, we actually had to bid two. What’s
Speaker 1 (04:00):
That?
Speaker 2 (04:00):
You had
Speaker 1 (04:00):
To build two of ’em. You had to bid two of them. I know. I’ve seen the pictures of that job that was before my time, but it looked extensive, you know, and that, I’m sure it cost a pretty penny to do that, to bring that place up into compliance. And then, you know, inadequate power that a lot of times with these older commercial spaces, with the amount of power that, that we use today with, you know, all the technology, the electronic devices, things like that, that different businesses may use. Uh, some of these older spaces may need retrofitting on their, on the, you know, their power systems. You know, they might need a new panel or a sub-panel, something like that. And those things can be costly. So those are three ways that we can, we can, uh, I’m sorry, those are three, three items in this first way of a pre-lease due diligence and, and feasibility study that we can help bring value for this, uh, agent and help ’em hopefully close the deal. Whew. That was a mouthful, dude. That was tough. Hopefully the general contractors Baton Rouge that have tuned in appreciate the effort lol.
Speaker 2 (04:56):
<laugh>. When I look at this first point of the three ways, to me, it’s, it’s like we’re educating, uh, you know, the real estate agent on the things that we’re, you know, pros at. I mean, obviously they know the space, they know what these things rent for, they know all that kind of stuff, but they may have a weakness in the sense that they don’t know if an air condition appears to be working properly or they don’t know, uh, you know, the requirements for a certain space, if they’re wanting to lease this out to, if in their mind they think this is a potential restaurant lease or whatever. Yeah. Then we can go in and point out that, you know, may, Hey, these bathrooms don’t meet a DA or two bathrooms aren’t enough for, for a restaurant. Yeah. Uh, you know, we can start to point out stuff like that, uh, that’s going to end up, you know, really adding some additional costs that they probably weren’t considering.
Speaker 2 (05:46):
Yeah. Uh, so to me, it, it gives that that agent a little bit of, uh, information, it gives ’em a little more education on, on the space, so mm-hmm <affirmative>. They’re gonna be prepared when they’re trying to push it to a potential client. Yeah. Uh, you know, you, you also mentioned, you know, electrical, uh, maybe like some inadequate electric, uh, or, or just upgrades that need to be done in that sense. Yeah. You know, we know that if it’s a restaurant, it’s gonna need a good bit more power than just your, your average everyday office. That’s right. Uh, and, and that may be something that, you know, a realtor may not be thinking that may not be front of mind. It’s something that we can point out. Yeah. Uh, you know, another one in line with this restaurant, um, you know, scenario is floor drains. Yeah.
Speaker 2 (06:29):
I know we’ve had a lot of ’em to say, well, man, we could set up a kitchen here, we could do this, but there’s no floor drains. Yeah. So that can, that can get to be exp uh, expensive. So stuff like that is stuff that we can point out, uh, you know, fairly easy. Yeah. And it really gives the, uh, the realtor a lot of good, you know, information to have there when they’re fielding this to potential clients. Yeah. Uh, and then, you know, there, there are hidden costs like asbestos and, you know, we’re, we’re familiar with, with what it looks like typically. I mean, obviously there’s a lot of different forms of asbestos, but Sure. We’re familiar with, with the common everyday type things that you see in older buildings and stuff that we could point out, uh, that, that may, you know, hamper a deal or, you know, just add some additional cost to a client that was leasing it that may end up, you know, souring a relationship between them and the realtor. So we’re able to point out those kind of things. And really, like I said, in this first phase, to me it’s just we’re able to educate that realtor, realtor in, in the areas that we’re, you know, pretty much familiar with.
Speaker 1 (07:29):
Yeah, exactly. Uh, I mean, they’re not expected to be construction experts, but yet what they do, their profession, uh, it crosses paths with, uh, that need, that trade, that skillset all the time because the spaces, a lot of ’em aren’t gonna be suitable the way they sit at once they take the listing to, to potentially lease it out. Right. This is a solid way general contractors Baton Rouge can help a CRE pro close more deals for sure.
Speaker 2 (07:51):
One, one thing you mentioned too, you had mentioned some, you know, maybe some budgeting cost at that, uh, you know, at that juncture in, in the, in the walkthrough. Very
Speaker 1 (07:59):
Rough. Yeah.
Speaker 2 (08:00):
<laugh>. Yeah. And I think, I mean, I think, and that’s what I was gonna say, I think that, you know, probably what we’re talking about in, in that first walkthrough is things that, you know, they may be throwing some ideas out there and we can say, no, that’s really expensive, or Yeah. Or Yeah, you can do that for a fairly, you know, decent cost. Yeah. Uh, and that gives them an understanding and a range of things that they can start to play with and suggest to clients and Yeah. You know, they know, well, you know, this is gonna really enhance the space and it’s not gonna be that expensive Yeah. Based on our walkthrough. Yeah. Or they can say, you know, I know that that’s gonna really push the cost up from what, you know, from what the information the contractor gave us. Exactly. So maybe they don’t make that suggestion. Yeah. But they help, you know, push their client into a design or a, you know, however you wanna call it, of what they need. Yeah. Uh, based on some conversations that we’ve had.
Speaker 1 (08:49):
Yeah. I think the main value of that feasibility analysis that we can, you know, do with, you know, a a commercial real estate professional is to help them, like you said, have a, a realistic conversation with their client so that their client doesn’t get, you know, fall in love with the space. That there’s no way they, they would ever be able to afford to build it out the way they think they’re, they want to. Right. And pay attention here general contractors Baton Rouge for the payoff.
Speaker 2 (09:12):
Or maybe it just don’t make sense for their business plan to spend that
Speaker 1 (09:16):
Kind of money. Exactly. And that way they can direct ’em more quickly to an, an appropriate space and, you know, nobody’s wasting their time. And, uh, and then you’re also more likely to close a deal. Obviously, if you’re, if you want to buy an orange and someone keeps showing you apples, you’re never going to, you know. Right. You’re never gonna sell that orange and Yeah. They ain’t gonna get their orange. So <laugh> very, that’s a simplified analysis there, but you get the point. All right. So that, that’s good. Uh, let’s go ahead and jump into the second way that we can, um, you know, help commercial real estate professionals, uh, hopefully close more deals. And this one is talking about tenant improvement, allowance negotiation strategy. So this would be like, if, if they’re showing a lease, a potential lease, a space, and maybe the space isn’t one that their firm has listed, so it, it’s another agency that has this space and they’re wanting to, uh, you know, help their client get fitted up with the right space.
Speaker 1 (10:15):
This kind of information can help agents, you know, better negotiate, like you, you said in your opener about bringing, you know, construction expertise into the negotiating table and close more deals. Well, this would be an example of that. You have a contractor with you along for the walkthrough, and they can, uh, you know, help point out things that are gonna have to be, uh, corrected or adjusted, modified, whatever you wanna call it. And that gives that, uh, client of the, you know, the real estate professional and the, the, the CRE pro himself or herself, the ammo, to then go to that listing agent and say, look, client loves the space, but this is what our contractor’s telling us that needs to happen for them to be able to use this space the way they need to for their business, and it’s gonna cost X amount of dollars.
Speaker 1 (11:05):
And then from there, they can, you know, start having a, uh, a meaningful conversation and negotiation about getting something done on space. So the points there underneath that heading of tenant improvement allowance and negotiation strategy, uh, we’re just gonna talk about how we can help brokers negotiate realistic tenant improvement allowances on the front end. We can provide itemized breakdowns like, uh, you know, that’s a little different role where, uh, you know, like I just said, you know, laid out the scenario there where we’re working with the agent who’s trying to help the lease, see, get the space, procure the space from a different, uh, agency maybe. So we can, at that point, we can really dig in once we identify the things that need to be improved and, and do a, uh, an itemized breakdown. And, uh, and that helps them justify higher allowance requests, you know, when they write the contract up.
Speaker 1 (11:57):
And then the other one, the last point there under this, uh, this heading, this, this point number two would be, uh, we can structure phase improvements. Like there might be a list of improvements or scope that we come up with as a builder that we see some of them might be need to do, nows, must haves, and then other ones would be like to haves that we could, you know, put together in a package to, you know, do it in phases or stretch it out as their money, their, their revenue as it, you know, they, they start to bring in revenue once they get their business up and running, would then allow them to do those other improvements. And by being able to put a little package like that together, a little plan, um, that could really help close a deal, you know, and, and I mean, I think the tenant would be more compelled to want to sign a lease with that agent being that they brought someone, you know, to the table that could do that for them. So, so give us your insight on this, on this helping with developing tenant improvement or ti uh, allowances as they say in the industry.
Speaker 3 (12:59):
Do you have a construction project but you just don’t know where to begin? Let us show you the steps that are necessary to make your project a reality. I’m John Kelly with Kelly Construction Group, and I wanted to jump in here for just a second and let you guys know that here at Kelly Construction, we’re more than just a builder. We’re your one-stop solution. We want to help you with planning, design, permitting, and construction. If this sounds like a solution, you need reach out to us today. We’ve left the links in the show notes, set up a call. Now let’s get back to the day show.
Speaker 2 (13:29):
Yeah, man, I think this is very common, and this is something that we’ve actually done quite a bit of. Um, and you know, I think where, what, what usually happens is, you know, we have a, you know, a commercial realtor that we worked with that we’re connected to, and they have a potential client that wants to lease a space, and they don’t wanna move forward because they don’t know what it’s gonna cost to get Yeah. To get their spot built out, or to get it designed and, and redone the way they want it. Yeah. Uh, so if the realtor can reach out to us and say, Hey, man, I got this deal. Can, can you come work with me? Help me put this together so that I can inform my client on what it’s actually gonna cost? Yeah. Uh, and then that’ll give them the tools that, that they need to know where they can move forward or not.
Speaker 2 (14:13):
That’s right. And we’ve done this quite a few times. It’s very, uh, like I said, it’s very common, uh, way that we’ve connected and helped commercial real estate deals move forward. Yeah. Uh, and you know, I know I can think of quite a few projects right now that we actually did just that exact scenario. We went and met with the realtor, we walked the space, we put together a preliminary budget. Yeah. Uh, you know, ended up connecting with the client after they signed the lease rehashed the rehashed, the budget kind of went through it, made sure everything fit their need. Yeah. Uh, taking a multiple of these, multiple of these projects through permitting design and into construction. Yeah. And, uh, it was, it was, the commercial realtor was, you know, able to close that deal because they had that information. They said, you know what?
Speaker 2 (14:58):
I understand your problem. I got a solution for it. Yeah. And we, we come in and we put together some stuff that worked and we made it happen. And, and there’s been, there’s been jobs where we, we threw a budget out there and it, it wasn’t reasonable. It just, yeah. It didn’t fit the client’s need. The deal didn’t happen for the realtor, but at the end of the day, they both knew Yeah. Uh, that it wasn’t gonna work. Exactly. Didn’t, they didn’t walk away from a deal just because they didn’t know what the cost was Exactly. Uh, so we’re able to put together that cost and, and kind of move the deal forward. Yeah. Uh, and and to your point about phasing things, I mean, that’s certainly somewhere that we can help out, because if they have a certain budget that they need to, to, you know, that they have available to get this project moving forward Yeah.
Speaker 2 (15:40):
Then we can put the bare necessities out there and we can, we can phase it and we can say, you know, it makes sense to do this stuff now and we can do these other things without interrupting business Yeah. At a later point. Yeah. And, and we’ve done some of that. I mean, I can think of a, you know, one of the bigger deals actually that we’ve done where a commercial realtor brought it to us and was like, Hey, we got a client, they wanna lease this space. Uh, what’s it gonna cost? You know, so that we can inform ’em that deal actually turned out to be a big deal, but it was the same type thing. Yeah. They started generating some revenue, and as they was generating revenue, they was calling us back saying, Hey, we wanna do this now, we wanna do this now.
Speaker 2 (16:19):
Yeah. And it was a few things that they wish for in the beginning, uh, but didn’t quite fit the budget, but as they were generating money, we were able to go back and add those things. Yeah. Uh, and, you know, worked out good for the, the realtor worked out good for the end user, and it worked out good for us. Now Sure. Now we all have, you know, other avenues for potential jobs just based on those connections. So for sure, you know, that, that number two way is, is, you know, something that we really see and, and, and work with often.
Speaker 1 (16:48):
Yeah. It’s like a force multiplier. Like, once you bring in another, another team, you know, to help you serve your client better, like GCs with CRE pros, now all of a sudden you’re just taking your ability to serve that client to a whole nother level. Right. And it opens up opportunities to the client that they may not see. If they’re just dealing with the, with the commercial realtor and not really getting that input, they, it, it may just be all something that’s on their plate that they’re having to try to mentally figure out. And, and it can kill a deal before it ever gets started because there’s just, it’s a lot of pressure. It, you don’t know what the numbers are. So there’s these big question marks about, you know, am I going to start this and not be able to finish it and end up with no money and no place to run my business?
Speaker 1 (17:34):
You know, there’s so many scenarios where if you just bring in a pro that can tell you what it’s gonna take to get there, it just answers all those questions and checks those boxes. Right. Really a win-win. So, um, all right. Good. Well, let’s go ahead and jump into this third point then. This is point number three, uh, of the three ways that a general contractor can help a CRE pro close more deals. So, uh, this third point, we’re talking about accelerating the occupancy timeline. So by having, uh, a contractor in the loop, like you said in the, in the beginning at the negotiating table, or even before that, you’re able to, obviously if it, when it clicks and it, and everything falls into place and it works, right, it’s a good, um, you know, a good match for everybody, then what it really does is it just speeds up the whole process.
Speaker 1 (18:24):
Because now you got somebody where, you know, you can make a call. They, you know, they can get on the phone to you and say, look, my client’s ready to roll, they want to do this. When can you get in there and you can get something scheduled? Typically in these type of jobs, it seems like they’re not, they’re not like some of the bigger projects we do where we gotta, you know, gear up to mobilize, we have a big handoff meeting, and, you know, there’s a lot more moving parts. And it, and it takes a lot more to get those jobs mobilized. A lot of times these jobs can mobilize rather quickly, you know, and you’re able to put ’em together really fast. So, uh, anyways, that’s the value of, of having that, uh, team assembled. So, uh, talking, uh, under this, this heading of the, of how to accelerate these occupancy timelines, we’re gonna talk about pre-construction planning during the lease negotiations, how we can get some planning done while they’re negotiating the lease with the listing agent.
Speaker 1 (19:19):
That’s awesome. That’s a huge time saver. Uh, coordinate with the landlord’s, contractors early to, uh, streamline approval. So, you know, if, if the landlord has, uh, you know, like if it’s a new, uh, development, they may have a contractor that’s building that development and the leases contractor has to coordinate with that, you know, um, contractor to be able to get in there and get this work done. You can already get those lines of communication open by having that contractor in place and then, uh, you know, get, create like some fast track schedules where, like you were saying, you can prioritize certain work and, and, uh, get that work addressed first so that they can, you know, obviously the goal with the, you know, any business owner is to get the place up and running and producing revenue. So anyways, give us some insight on, on, I know that you’ve been involved in several of these deals, so tell us how, how this can hap happen and how it, it really does speed up the process.
Speaker 2 (20:21):
So the first thing that comes to my mind, you know, in the pre-construction planning, uh, phase is setting some realistic timelines, you know, for, for the client on what it’s gonna take to, to get a project permitted to get it built. Yeah. Uh, to your point, if it’s up a simpler job that doesn’t require a bunch of permitting, that kind of thing. Yeah. Just setting a realistic timeline so that they can plan and, and do whatever it is they need to do. You know, if they’re gonna open a business in 30 days Yeah. So they can start getting, you know, the money and the plan and all that together. If it’s gonna be 60 day anyway, they can, they can plan accordingly once we kinda set some timelines. Uh, and, and the same thing, uh, you know, for the realtors specifically, if a realtor’s providing a certain portion of the build out mm-hmm <affirmative>.
Speaker 2 (21:04):
Uh, anything like that, we can set that timeline out there. Yeah. But to your point of accelerating the schedule, if, if they’re confident that this is a, a done deal or close to it and they’re just negotiating, you know, length of term, uh, or, or rates, whatever, yeah. Then we could go ahead and start doing that build out. We can have that ready so that when the deal’s done, the realtor’s portion of the work is actually complete. Yeah. And they can move in and, and oftentimes when that client moves in, we would do their work also. Yeah. You know what I mean? We’ve, we’ve done that quite a few times. Yeah. And, you know, that’s another area that it’s kind of a, I guess, a benefit because, you know, we’re able to do their pri their co their, their projects at a more affordable rate if we can combine ’em and do both sides of it mm-hmm <affirmative>.
Speaker 2 (21:51):
Uh, but to me that’s ways that we can, uh, you know, provide some good information in that pre-construction. A lot of times, you know, we find that clients don’t understand how long it takes to get a project permitted. Yeah. How long it takes to get plans drawn. Exactly. Uh, so that’s really key, really critical information to understand in the beginning. Uh, and once you understand that you have a real expectation for, for, you know, what the schedule’s actually gonna be. Yeah. Uh, and I know we’re talking about acceleration here, and I’m talking about how long it could take. Yeah. But that’s information that you have to know, uh, before you can even really start to look at an accelerated schedule. Because if you’re, if you’re talking about how fast we can do something, but there’s no real expectation on, you know, how long design takes, how long permitting takes. Yeah. Then it’s, you’re starting off on the wrong foot, you know?
Speaker 1 (22:43):
Yeah. Yeah. If you don’t have the basic understanding of what the process is, then yeah. It, that it’s <laugh> the process is gonna take that that many times longer. So, uh, it’s accelerated in the sense that once you know what the steps are, you can start taking the steps.
Speaker 2 (22:58):
And two, you had mentioned working with another, you know, maybe the contractor who developed a spot or whatever. Yeah. Uh, you know, I find that a lot of times, for whatever reason, it seems like when I’m in a build out, like the contractor’s been long gone, so there’s not a lot of good information we can get from those guys. Yeah. However, there, there typically are plans and stuff like that available. Yeah. Yes. And the quicker we can ask for that kind of stuff and, and get our hands on that kind of stuff from the realtor, yeah. Uh, we become a lot more of an asset and, and things can be, uh, uh, accelerated a lot faster. Yeah. Once we realize and understand where things are located, where, where are your drain lines, where is your main electrical feed Exactly. We, we can help push things forward, uh, like design or construction, uh, you know, once we have that information.
Speaker 1 (23:46):
Yeah. Good. All right. Well, it, it sounds like, you know, those are three pretty solid ways that we can help commercial real estate brokers close more deals if they would just pick up the phone, give us a call. Uh, you got any closing thoughts about, you know, the opportunity here that, uh, we might be missing a lot of opportunities from just not getting together with, with, uh, our friends in the real estate community?
Speaker 2 (24:11):
Yeah. I mean, I would like to think that there’s, there’s plenty of opportunities out there that, that, you know, that don’t connect or don’t happen, uh, that if we do some of the things that we talk about today could convert. Yeah. Uh, you know, for, for the realtors and for us as GCs, you know? Yeah. Uh, so I’d love to explore more of it. I mean, we’ve already seen it work a lot. Uh, I know that was a point of emphasis for us for a while was, was trying to connect with realtors, and we still do that. Yeah. Uh, and then we’ve definitely seen it work. So yeah, I’d love to see some more opportunities and, uh, bring it to life. I mean, I think that, you know, a few of the jobs that we’ve done are people that we connected with and, and, and had multiple opportunities. Uh, so I feel like it’s a good strategy for, uh, you know, for, for building long time clients. For sure.
Speaker 1 (24:58):
Absolutely. When it, when it clicks, it just clicks and it works really well, and it, and it’s great for everyone involved. So, so, uh, definitely, uh, hopefully you enjoyed this, this episode. Hopefully, if you are a commercial real estate pro and you’re watching this, uh, episode, you’re understanding, uh, you know, what we’re trying to, to, uh, uh, establish is that there’s a lot of value here with your general contractors that are in your market. And, uh, and there’s a lot of untapped potential, I think, and, uh, you know, helping you guys move deals forward. Uh, just simply being able to get numbers and get a budget can, can help a lot of your clients, uh, be able to say, yeah, I can do that. That sounds like something that I want to go forward with. So, uh, don’t hesitate to give us a call. We’re a great source. Also, if you’re a general contractor Baton Rouge please be sure and make an effort to reach out to some CRE pros in your market and take the initiative to offer opportunities to collaborate and close more deals.
Speaker 1 (25:46):
Uh, we’re a great resource for information. Uh, we can answer any questions that you have about a space and, and a particular, uh, scope of work that may, uh, need to be done in a space. So, you know, don’t be shy. Pick up the phone, give us a call. We’re always here, we’re always ready to talk to you. And, uh, we can go grab a coffee and, uh, whatever, whatever it takes, right. To bring this deal together. So anyways, we hope you enjoyed the episode. Uh, keep coming back for more and, uh, please subscribe, like, and subscribe. Um, subscriptions help this, uh, show get pushed out to more, uh, listeners and viewers. So, uh, please just take a minute and hit that subscribe button. Uh, we won’t be, uh, you know, spamming you with a bunch of notifications or anything, but just get your, uh, you know, put your hand up, uh, in that, uh, you know, that box that says that you subscribe to the show so that, uh, we can get it out to more people. So anyways, that’s it, John. We’re outta here.
Speaker 2 (26:46):
Good show. Talk to you later. Big joke.
Speaker 1 (26:49):
Adios, big John <laugh>. Here we go.