Company Bio

CM Partners Group (CMPG) is a full-service project management firm based in Diamond Bar, California and serves clients throughout California and out of state. Their three main lines of business are Project Management, Move Management and Consulting. CMPG works closely with the client, broker, landlord, building owner, architect, consultants, contractor and/or vendors to ensure the end product meets their clients’ objectives and results in a functional, sustainable space built within budget and on schedule. For all projects, their responsibility is to develop and lead a team that can specifically and effectively accomplish the client’s objectives.

Key Takeaways

• For companies looking for space, engaging a project manager usually stars when identifying building finalists to verify cost, schedule and functionality of each property.
• Work letters are a great source of misunderstanding between landlord and tenant and a tenant is wise to understand what is included within the base building and how reimbursement of tenant improvements is going to be structured.
• Spending time up front going deep into general contractor bids results in uncovering of discrepancies and shortcomings of bids and an opportunity to level the playing field
• Move management usually covers IT, AV, security, signage, furniture, equipment and the actual move and encompasses identification of qualified vendors, technical requirements, scope detail, selection, training, scheduling and more.
• CMPG understands the process so well that they will often times have a cabler and electrician on standby the first day of business to immediately respond to miscellaneous issues that inevitably come up. It’s considerations like this that improve the relocation experience.

Background

Justin Smith, Senior Vice President with Lee & Associate’s Irvine office, spoke with Christie Fischetti, the owner at CMPG, to get her perspective on project management and move management, and how factors like IT, AV, security, signage, furniture, equipment and the move itself come into play when relocating and deciding bids.

What was the impetus for starting your own firm?

I’ve been doing project management for over 30 years, 23 of which I spent at Trammell Crow Company/CBRE. The time spent at TCC/CBRE was invaluable as I gained extensive experience in project management, property management, leasing, operations and account management.

I started CMPG almost 12 years ago in order to be able to provide project management services with expanded options, flexibility in scope and very high customer service.  That’s really the foundation of CMPG.

We’re a unique size for a project management firm, currently with 19 full time employees. We look for people with different experience, backgrounds and strengths. I don’t want cookie cutter employees; I want a broad base of experience and talent; our employees have great internal resources available. This allows us to manage many different types and number of projects, but we’re still the right size so that I can manage our people, coach our people, and be involved in the projects myself from a coaching, mentoring and client-relationship standpoint.

What is the divide between tenants and landlords and when do you typically get involved?

I would say a little bit more than 50% of our work is tenant/occupier representation and the other is landlord/investor.

Ideally, we get involved early on in the process. For landlord representation, we want to be involved at the beginning of the transaction with a prospective tenant. We work with the landlord and broker to provide information on how much construction is going to cost, schedule, impact to the common areas, tracking of rentable square footage measurements and what will need to be done in terms of construction.

For tenant representation, we want to get involved as they identify their building finalists. We want to walk those spaces so that we can evaluate based on the client’s objectives: How much is it going to cost to build what they need? How long is it going to take? What are the advantages of this site over another location? We’ll certainly look at cost and schedule differences, but we’ll also focus on functionality.

For example, one of our clients is in the entertainment industry. They don’t work typical building hours, they work late in the evening and at night.  If this client leases in a multi-tenant office building, they will be subject to after-hours HVAC costs for work after hours. In this case, we worked with the building, client and MEP engineer to utilize a supplemental heat pump system which reduced their after-hours HVAC usage and costs.

As another example, if we’re representing a light manufacturing tenant, one of the items we review is the electrical service to determine if the existing electrical is sufficient or an upgrade is required. An upgrade would materially impact both budget and schedule.

In both cases, this allows our client to make an informed decision on the transaction utilizing information we provide regarding budget, schedule and function of the space. Bottom line is that our job is to manage risk for our clients.

One of the most impactful areas that we get involved with pre-transaction is assisting in the review and negotiation of the work letter and language related to construction in the lease. We review, provide our comments and input, participate in calls with the attorneys and assist the broker in negotiating the lease. We provide “must have” and “nice to have” options with our recommendations.

Where do people usually go wrong in the work letter?

There are so many ways to go wrong and miss important items in the work letter. One example is the specifics of the delivery condition of the space. Leases will typically say the tenant will be taking the space “as is”.  However, it is important to try and incorporate language related to the existing base building systems.  As example, including language that says, “existing base building equipment and systems are in good operation condition.” Another issue that comes up is electrical consumption. A landlord wants to protect themselves from higher electrical costs for a non-standard office use. A tenant wants to understand their exposure related to the electrical use restrictions or language within the lease. This can be a complicated issue and difficult to quantify and identify. We assist our clients in negotiating language that is appropriate and protective for their situation.

Another important area is reviewing how the TI reimbursement is structured. What is an allowable use of the TI allowance? What does the landlord require for reimbursement? What is the timing? Does the landlord need to pay the general contractor first or does the tenant have to pay and then get reimbursed? In all cases, cash flow is impacted, so it’s important that a well-written and practical process is incorporated into the lease.

Regardless of who we are representing, we want to provide reasonable recommendations resulting in fair and applicable lease language.

How do your fees work?

As project manager, we’re in a unique position, different from other consultants, in that we are able to offset our fees by finding savings or avoiding costs for our clients.

With our landlord clients, our fee is usually structured as a percentage fee, based on costs.  This pre-established structure allows us to quickly respond to multiple deals in a building, without having to renegotiate or discuss fees for each transaction. With tenant clients, we can structure a fixed fee, percentage fee or hourly fee; however, with most tenants our fee is structured as a fixed fee. We feel tenants are often more comfortable with having predictable fees. In our proposals, we will outline our assumptions for scope and the duration for the project. Based on these assumptions, we will provide them a proposal with our fixed fee. During the course of the project, if either the scope or duration changes we would submit a request for a modified fee – either higher or lower dependent upon the change in scope or duration. I believe that tenants are also more comfortable with a fixed fee versus percentage as there is no perception of a conflict of interest when we are reviewing change orders and other costs.

How do you find the tension between working in the same direction and also managing contractors?

The philosophy is: “tough but fair”.

We need to be tough on contractors. We need to have high expectations. We have an established contract, we have construction drawings and the contractor’s bid.  Based on these items the contractor will be fully expected to complete the work, with good quality for the price bid. On the other hand, if a legitimate change order is submitted we will review the drawings, scope and pricing – if it is determined to be a change in scope, a fair and competitive price, then we will submit to our clients with our recommendation for approval. I think that contractors feel like we will go to bat for them on legitimate issues, but that we will keep them accountable for their contract and the drawings.

How do you handle bids, especially when there is a huge discrepancy?

We spend quite a bit of time on the bid comparison and bid evaluation, which are two different tasks.  We start first by comparing the bids, going pretty deep into the scope and detail provided by the contractors. We identify material discrepancies, then review to ensure we understand scope and what is included in the pricing.

To protect our clients, we need to understand the source of the discrepancies – these may come from gray areas in the drawings, incorrect bids by contractors or, most importantly, items captured by one contractor which are not covered by other bidders. We then “level” the bids, including adjustments so that we have a reasonable “apples to apples” comparison. This provides us with the financial comparison of the bidders.

We next need to perform a qualitative comparison of the bidders.  We look at staffing, project experience, subcontractor quality, project approach, site logistics plan and anticipated schedule. We rate the contractors so that we can provide the client with a qualitative comparison of the bidders.

Based on the results of the bid and qualitative comparisons, we will prepare a bid evaluation to submit to our clients with a recommendation for contractor selection.

As a simple example, we recently bid the cabling for high density firm. All three bidders were pre-qualified and capable of doing the work. When the bids came in, however, two of the bidders had a similar number and one was about 50% of the others.  We scrubbed the numbers and it appeared the low bidder had everything included. So, we recommended selection of the low bidder, but advised the client that we were including an additional contingency to protect the client. As it turns out, the low bidder completed the job with no additional dollars required.

How does the move management process work?

At CMPG, what we call move management covers seven categories: IT, AV, security, signage, furniture, equipment and the actual move. We can manage all of these categories for a client. For the client to manage it directly, they need an in-house resource who has both a) the relevant experience and b) the available time. It is rare that a client has an employee with both. In all cases, the coordination with the landlord, contractor and tenant is critical, and best managed by CMPG as the project manager.

For cabling and AV, we work with the client’s in-house IT team to prepare their technical specifications and we manage the RFP process, vendor selection and oversight of the work.

Security. The client may have a combination of surveillance (security cameras), access control (card readers) and intrusion (motion sensors, etc.).  We would assist in developing the scope, identifying qualified bidders, managing the RFP and overseeing completion of the work.

Signage. This includes interior (reception, office) signage, but also exterior signage if the lease provides the tenant with signage rights. Exterior signage is the most complex, requiring compliance with the tenant’s branding requirements, property signage program and city planning codes. The City approval process for new signage can be lengthy, so we want to start this process early in the project.

Furniture. This area can be one of the most complex, with the longest lead times, high cost and huge impact on design. In CMPG’s standard scope, our services include managing the tenant selected furniture vendor. As the project commences, however, we provide the client with options on furniture vendor bid and actual furniture selection. Whether we are involved in the bid process or not, there are critical coordination items that CMPG must oversee: electrical details and locations, delivery dates, coordination with cabling, coordination with architectural details and impact on final inspections.

Equipment. Tenants with heavy technical or manufacturing equipment require very detailed coordination. We work with the tenant to minimize disruption to their operations by managing installation requirements (electrical, HVAC, plumbing) and carefully planning the relocation logistics to reduce downtime of production and operations.

Relocation. The move is a big piece. We identify qualified vendors, develop the scope, bid and select the mover, lead move planning/training meetings, schedule the move and oversee the actual relocation.  The relocation can be done all at once or in phases, depending on the number of employees and operational needs. For the move, we’ll be on site the Friday of the move weekend, starting in the afternoon.  We’re there to answer questions and provide direction for the movers and client. Depending on the size and the timing of the move, we may need one project manager at the source building and one at the destination building to fully coordinate.

For the first day of business, we often suggest having a cabler and an electrician on stand-by at the site in order to immediately respond to miscellaneous issues that inevitably come up the first day of business.  We also have a simple work order system where employees can log requests, so that the receptionist or office manager isn’t getting all of the requests. We track the requests and then we triage the items – which go to IT, which go to the mover, etc.– and help manage the post move. Like anything, it’s about managing expectations ahead of time so that people are aware of what to expect.

Do you find that you are usually brought in for construction or move management more?

On most of our jobs we’re doing both. We’re doing the construction and move management for tenants and then on the landlord projects it would just be the construction management. However, we do help the landlord by advising the tenant coming in. It benefits everybody if we can coach the tenant on how to coordinate their vendor work with construction. In some cases, we’ve worked with both sides where we represent the tenant for move management and the landlord for construction.

How do you manage projects? Do you use any special software?

CMPG has a very extensive infrastructure for budgeting, bids, bid evaluation, cost tracking, insurance and all required documentation. This system has been developed utilizing Microsoft Office programs and works exceptionally well. CMPG has been looking for a project management software for over two years that can do at least 80% of what our current system can do, but we can’t find one. Everyone at CMPG uses the same processes and the same systems. All files are kept on our server, allowing us to provide up to date information to our clients at any time. Our systems are consistent so, regardless of who’s working on the project, everything our clients receive will be of the same quality and format.

One of the key components of the CMPG system is our ability to provide accurate and timely projected costs information on the clients.  My philosophy is that anybody can report on what’s already happened; we need to accurately project anticipated costs going forward. At any point in time, we can tell our clients where they are at in their budget and how much contingency they have left based on everything we know at that moment. They need to have that information to make decisions at the end of the day, so we need to make sure they have the opportunity to make decisions in a timely manner and not under the gun.

How do you think this industry will change in the next couple of years?

I think that other project management firms are going to need to be able to improve their ability to project costs; I think clients need and expect that ability.

On another note in the industry, the change that clients will need to start getting comfortable with is the integrated delivery model. This involves bringing in the architect, the general contractor, key subcontractors and other stakeholders at the beginning of the project. This team is used to design, plan, budget and schedule in a collaborative manner. This approach is currently used for more complicated projects, in order to anticipate issues going forward. However, this model will expand going and result in a more coordinated project with increased predictability in schedule and budget.

For more information regarding this interview, please contact:

Justin Smith, SIOR

Senior Vice President

949.790.3151

jsmith@lee-associates.com