Landlord construction teams save time and money.

Traditionally, when it came to new office space construction, real estate brokers would advise clients to get competitive bids from several potential outside contractors--but not from the building landlord. Many brokers today are challenging this historical norm by recommending that clients consider their landlords' in-house construction management services and the time and cost savings associated with them.

Several landlords throughout the New York tri-state area, like Equity Office, the nation's largest office building owner, offer in-house construction management services. With the sole purpose of providing trusted, reliable and cost-beneficial services to tenants, construction management teams streamline renovations and build-outs for small-to large-sized businesses, since many tenants cannot dedicate enough time or resources to handle construction projects internally, or lack strong external contractor relationships. The in-house management approach also caters to businesses that are working under a tight schedule, are facing high holdover rent, or whose survival depends on client service, and thus require minimal-to-no business interruption. By focusing on tenants' earliest needs--the construction of their space--landlords are establishing a strong foundation for a positive, long-term relationship.

In the summer of 2004, the PGA TOUR (the governing body for men's professional golf) decided to expand operations from its headquarters in Ponte Vedra Beach, Fla., and establish a presence in the northeast to work more closely with its television partners and corporate sponsors. The goal was to open an office in Tower 56 at 126 E. 56th St. in just under two months--a construction timeframe virtually unheard of in a city as large as New York.

The PGA TOUR benefited from the support of Equity Office's combined in-house construction management team who recommended and managed the general contractor, and offered complete project management/coordination services from start to finish. The in-house team essentially "ran the job"--completing design document review, bidding and awarding the project, developing a phasing plan, maintaining a comprehensive project schedule to meet all deadlines and minimizing project delays/added costs by quickly addressing changes as they occurred.

In addition, while construction was underway, Equity Office provided temporary, fully equipped office space in Tower 56 to accommodate the customer's business needs well before the official move-in date. This flexibility afforded the PGA TOUR the opportunity to attend weekly construction management team meetings/updates, become acquainted with building staff and fully acclimated to New York City.

Quality and efficiency is vital to an organization like the PGA TOUR, and by employing an integrated team of construction and property management experts to assist with its New York office opening, the organization was able to realize ultimate success--an on-time move and great new space in an entirely new geography.

Why are so many customers like the PGA TOUR now choosing the landlord's in-house construction management team? Clients cite cost savings, speed/efficiency and reliability.

In New York, a major driving force behind the growing success of in-house construction management is "speed to occupancy" and the ability to shave off valuable time for tenants who must relocate or expand their space in a hurry and with minimal disruption to business.

One of the biggest factors in minimizing moving or expansion delays is selecting the right general contractor. Oftentimes the contract negotiation process, in which contractors and subcontractors estimate the costs associated with the construction effort, can take up to two weeks to complete. By working with an in-house construction management team and the general contractor the team recommends, tenants often save valuable time and money. With 14 buildings in Midtown, New York and Stamford, Conn., Equity Office regularly partners with general contractors and designers that already have familiarity and experience working within our buildings. With this expertise, they can hit the ground running as soon as a lease is being finalized, often completing the construction contract within one day.

In addition, when using a traditional team of external subs/contractors, making design modifications or alterations during construction can be a lengthy and confusing process. This can be particularly true if a direct line of communication with the contractor is difficult to establish. In-house construction management teams alleviate the confusion and keep projects running efficiently by holding weekly project update meetings in which tenants can speak directly with the construction management team about specific changes they have and by promoting direct email communication.

As Ric Clarson, senior vice president of business development for the PGA TOUR, describes, "Critical to the success of the project was that Equity Office made it possible for us to be in the building early-on and encouraged our active involvement throughout construction. From the beginning, we had complete confidence in the build-out schedule, recommended subcontractors, quality of the building and the integrated maintenance, security and property management team. As an Equity Office tenant and construction client, we knew our job was given priority status."

In addition to the cost savings associated with "speed to occupancy," many landlords' in-house construction management teams have taken the "guess work" out of the bidding process. Through standardized design and construction agreements, customers are provided with line-by-line itemization of every cost. Providing an accurate preliminary pricing plan based on appropriate building assumptions is another way conscientious in-house management teams can help guarantee "what you see is what you get."

In addition, by leveraging established relationships and purchasing benefits with manufacturers of product such as flooring and window treatments, landlords like Equity Office are able offer fair and competitive pricing.

Finally, choosing a coordinated in-house construction management team can help ensure quality and affordable results, as well as service by reliable, competent professionals intent on delivering top-notch service and establishing building lasting relationships with their tenants.

The in-house construction management approach can increase reliability and provide:

* Shared interest in quality construction and efficiency, while maintaining the integrity of the building

* Inclusive, team-approach to completing work (e.g., direct, open lines of communication between the architect, broker, contractor, in-house team and customer)

* Subcontractors with proven track records and familiarity with the buildings

* Strong knowledge of/adherence to building codes and standards

* Ability to handle small construction changes without "change order/nickel and diming"

In New York and throughout the country, landlords are expanding their traditional roles by offering comprehensive, competitive service offerings and becoming "one-stop shops" for tenant build-out needs. In-house construction management is a great example of a complete project management solution that contributes to leasing success, builds strong customer relationships, and is a smart option any company should explore when its space needs change.

DON HUFFNER, SENIOR VICE PRESIDENT, NEW YORK REGION, EQUITY OFFICE