To further illustrate, let’s look at 2 of my own clients and also the owner of the 678 restaurants Brad Finefrock - 3 commercial investors who heavily invested in good design and have since reaped the rewards - even in this economic climate.
The City of Camarillo, CA was changing fast and both property owners, Tom Carr and Dave Wallace knew it. They both had properties that hadn’t been touched in over 50 years. Carr wanted a contemporary Frank Lloyd Wright building and Wallace was looking towards Spanish/Mission style - both of them were willing to do it right and not on the cheap.
Both achieved their ends with great success.
Mr. Carr was able to pre-lease his building before any construction commenced. His project was so enticing that most of the tenants moved into the “before” building and suffered through the construction to have a space. The building’s lease rates are now twice what they were previously and has tremendously increased it’s long term value.
Mr. Wallace pre-leased his spaces before construction finished - based, again, solely on the design of the facade. He tripled the lease rates and says he now has class “A” tenants and no competition up and down the boulevard for his type of building.
These immediate returns are quite something given the current climate of this market; where a “for lease” sign graces nearly every block of commercial real estate.
In the case of Mr. Brad Finefrock, general partner of the 678 restaurants, the demand was so high he knew he couldn’t lose.
Tired of driving to Malibu, Hollywood or Santa Barbara for a great place to eat he decided to bring it himself. He and his partner Jerry Rubacky, built P6 in Westlake Village and awoke an entire youthful community with nightlife, fine food and atmosphere that was previously non-existent. P6 is at once contemporary, but retro - with “Barbarella” playing on the flatscreens in the lounge amidst veneers of ebony wood, zen bamboo, and riverrock (read: James Bond, but now-ish).
It was an immediate success and fueled the building out of Chapter 8 (a more formal steak house) and then Suki 7 (a sushi bar with a hot kitchen that serves both formal and everyday dining).
In addition to the fine food and service, the design of his restaurants is an enormous generator of revenue -”without a doubt” he says “people come to the restaurants at first just to look around”. Mr. Finefrock recognized a need for design, a thirst for ambiance that was desolate in the area. Finefrock filled that need.
Beauty Matters. Aesthetically and financially. All 3 examples prove that even the bottom line, in commercial property investing, can be highly influenced by design. If one can read the right opportunities and demographics, heavily investing in the atmosphere of the built environment can pay back in large dividends in the short term as well as the long.
All of my clients loathe the idea of trying to find a good residential builder. We have all heard the horror stories; it can be a regrettable situation if not approached correctly. However, by knowing your priorities, asking a few direct questions and getting a little education you can clear a path through an otherwise daunting experience.
Start out by knowing yourself and your priorities well. Become familiar with the “golden triangle” of “GOOD-FAST-CHEAP…pick any 2″. It is a hard truth of construction that only two of the three are truly viable options. Often I have seen clients go for the low bid only to tear their hair out later as the realize that the schedule or craft of the project is more important to them. Be honest with yourself; decide which 2 of the 3 are the most important to you and hire a contractor known for delivering those. Having a made a conscious choice, the process, even during the harder times, will flow more easily knowing your priorities are intact.
Referrals are tremendously helpful in this regard, but be careful to make sure that the person recommending the contractor has the same priorities that you have. For instance, someone may rave about a contractor and go on about his/her attention to detail, but perhaps leave out that the schedule drifted or that maybe the budget grew throughout construction. Be careful to understand how some people use the term “craft” as well…what is well executed craftsmanship to one individual may be unacceptable to another. Here’s a hint, if as a homeowner, you know what the term “full tile” is then you had best hire the top of the line craftsman! It is vital to interview the people giving the referrals as well as the contractor themselves. You want to make sure that what was good for them will also be a good fit for you too.
Then get to know your contractors. Ask probing questions some of which may be uncomfortable to ask, but can protect you tremendously:
- How long have you been in business?
- Are you licensed and insured?
- How many similar projects have you done?
- May I have a list of references?
- Do I need a permit?
- Have you ever been sued?
- What was the last conflict you had with a client and how did you deal with it?
- What will the communication with us be like throughout the job? Weekly meetings? Bi-weekly?
- Will you be the supervisor on our project?
- If not can we please interview the person who will be supervising our project?
These questions will flush out any irregularities that could become unfortunate surprises later. All the while, pay attention to how the contractor answers your questions:
- Does the contractor return your calls in a timely fashion?
- Do they seem eager to do the job?
How they handle the interviewing process alone will provide information as to what it may be like to deal with them throughout the project.
Continue on by educating yourself as much as you can. The California Contractors State License Board at http://www.cslb.ca.gov under the consumer section, has a wealth of information. Not only do they explain how to hire a contractor but also how to check on the status of their license, how to negotiate bids, contracts and payment options as well. This is one of many resources that take little time to peruse but can save you enormously later. Those of you working with an architect will get their expertise as they guide you through the selection process, as is this is one of their primary purposes - to represent and protect the client, especially during construction.
Construction can be quite challenging. Shipment delays, weather and other unforeseen events seem to always occur. But by hiring a contractor in an educated, methodical and well-informed manner you place yourself in the best possible position for a rewarding experience.
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