90 Days Out

Ninety days in advance of your move, you should be interviewing moving companies. Each one has its way of bidding, much like the general contractor bidding section we discussed in the tenant improvement chapter. Making sure your moving bids are comparable and use each bid to help clarify the others.

You’ll want to inventory all of your furniture, equipment, and contents of your offices and warehouse. Itemize your equipment to understand which pieces have special needs for disassembly, reassembly, and care during moving.

Consider whether your machines or equipment have warranties and if those warranties require specific vendors. Machinery and equipment from the warehouse will need a particular mover that specializes in heavy machinery and rigging. You will have to bid out your machinery moving to multiple specialized movers as well. You’ll find that there will be an overlap in service from a traditional mover and a heavy machinery mover. This can be yet another area that will bring forth clarity and competition.

Evaluating your mover’s insurance policies, waivers, and disclaimers is a must as well. Your contract with your mover is like your contract with your landlord and your contractor. It pays to be crystal clear on who is responsible for what over time, and what happens when people deviate from the agreed-upon job. You may want to have your attorney review this contract and you may want to check with your existing and new landlord to see if they require a copy of the insurance certificate.

Discussing security procedures and access is a must. If the move it going to take multiple days, it is imperative to have all security concerns addressed upfront so that everybody is aware of who is allowed at the job site and how the building security works.

60 Days Out

Develop a strategy for communications to all employees and develop a migration plan that maps out the department’s timing and location.

Think through the closing, redirection, and setting up of services like mail, phones, faxes, and telecom service. You’ll need to update existing vendors for supplies like water delivery, coffee service, and office supplies. Make sure to notify and update service agreements, licenses, insurance, equipment leases with your new address, and the timing of the move.

Have your external and internal marketing departments update all marketing collateral and order any physical materials like brochures, placards, letterhead, envelopes, and business cards. Sixty days out is a great time to plan announcements, schedule an open house, and send out press releases.

Confirm that you have contracted for the setup and installation of all operating systems in the new building like water, power, elevators emergency phone, HVAC units, and fire life safety systems.

You’ll want to confirm with your moving company the numbers of totes, cartons, containers, and schedule the distribution of all packing equipment.

30 Days Out

• Schedule the delivery and installation of new furniture and equipment
• Explain to each employee what they will be required to do – remove contents from desks, pack books and files, color code boxes, etc.

• Develop a color-coded floor plan of the new facilities to show where to place all items
• Color code all furniture and equipment
• All keys to desks, file cabinets, etc. should be wire tagged and labeled in a safe place. Tape keys to empty desks and file cabinets. Make sure you have duplicate keys

• Install locks at new facilities and make duplicate keys. Distribute keys to appropriate employees
• Arrange for the distribution of parking passes and security cards for the new facility. Maintain proper records for control and audit procedures
• Schedule staff for unpacking and stocking supply cabinets, storerooms, and file rooms, and remove tags from all furniture and equipment to ensure you are operational as soon as possible
• Prepare employee welcome packet for the new space (including areas such as restrooms, gyms, break rooms, copy rooms, etc.)
• Create a list of emergency contacts, cell phone numbers, and vendors that includes moving company, building management, utilities, telecommunications, etc.
• Arrange for cleaning of the old facility after the move as been completed

7 Days Out

• Put up directional signs, room and area labels, and furniture plans in the new facility
• Distribute contact lists for emergency/on-site/on-call lists
• Create a “lost and found” department to locate lost boxes, personal items, etc.
• Backup computer systems
• Protect elevator cabs, lobbies, walls, and floors against damage from moving immediately before move-in day
• Transfer your insurance to the new site. Get Certificates of Insurance from the insurance company

Move Day

• Check inventory as contents load into each moving van.
• Walk the perimeter to look in elevators, lobbies, hallways, and offices before the last moving truck leaves for any items that have left behind
• Record what time the mover arrived and the number of movers working on your move
• Carefully read the bill of lading (contract between you and the mover) before you sign. Keep it with you until everything is delivered, charges paid, and any claims settled
• Indicate on the mover’s inventory any damaged boxes or items before signing paperwork
• Distribute employee welcome packets
• Hire IT and electrician to be on hand for move day to handle real time requests

Post Move

• Distribute new contact list and layout of department locations
• Reconfirm the termination of old leases and the return of security deposits
• Confirm the proper completion, delivery, and installation of all items on both the construction and vendor punch list
• Arrange for maintenance of the new facility. Establish housekeeping rules
• Audit final invoices against contracts and progress payments and pay retention
• Complete and file all warranty information for all new furniture and equipment
• Update the fixed asset accounting system for any new furniture and equipment purchased. Do not forget to delete any old furniture and equipment sold or given to charity
• Confirm the change of address corrections
• Update address for business certificates, State Board of Equalization, Certificate of Occupancy

 

Surrender, Restoration, Decommissioning

It is usually nostalgic to look at your old warehouse once you’ve moved out of it. Most people take a moment to think about how they grew over time and memorialize all of the moments that made their company what it is today. After that moment, it is vital to read through your lease, specifically the section labeled surrender. The surrender clause states the condition in which you must deliver the property back to the landlord.

Cabling is the most often overlooked surrender item when it comes to the office portion of the property. In industrial real estate, there are a lot of tenants and landlords that disregard or neglect this part of the lease. Any sophisticated landlord, or landlord with a background in office leasing, will ask that you remove your old network cabling. The thought here is that if the tenant leaves it behind, it will become the obligation and expense of the landlord to remove it. New tenants don’t want to be responsible for removing all of the existing network cablings if it is outdated and unusable.

The most common decommission item in the warehouse is the repair of the concrete slab. It’s mandated by code that bolts anchor racking down to the concrete slab at specific torque levels. Especially in geographic areas of seismic consequence. When racking is removed, these bolts will need to be clipped, ground down, and then the remaining divot in the concrete needs to be filled in and smoothed so that the floor is in the same condition it was when you first leased it. It may not sound like a big deal until you imagine 400 bolts that need clipping, grinding, filling, and smoothing. Heavy-duty machines installed on footers can damage the concrete slab during operation and disassembly and will need to be considered as well.

If you procured new racking and new machines for the new building, you will need to assess what to do with the old racking and machinery. It is common to have the general manager designate someone to sell all old items. There are auction houses that will come into your warehouse and stage an auction onsite. There are also liquidators who will remove everything for a flat fee. Sometimes you are looking for compensation whereas others you are looking at cost avoidance or simply convenience.

We worked with a global supplier of industrial brake pads in Ontario, CA who was moving their manufacturing to Mexico and had hired us to sell their existing 42,000 SF warehouse. They had left over machinery and tools that were not going to make the move. They managed to sell half of the things they no longer needed successfully, but it took months. It took countless meetings, haggling, pickups, canceled meetings. While they must have recouped tens of thousands of dollars, it is internal decision as to whether that was the best use of the facility manager’s time.

The surrender section will have language regarding the repair and restoration of the building systems at the end of the lease. The thought here is you took possession of the building with all of the building systems warranted to be in good working order, and you should return the building with everything in good working order, wear and tear excepted. This concept is straight forward at first. But once you have lived through enough leases, you find plenty of room for ambiguity in specific situations.

For example, what if you were in the building for ten years, and when you initially signed the lease, the HVAC units were ten years old. Now, these units are 20 years old, and they still work with regular service. But they are sure to break down at any moment. They can’t last forever. You may have an obligation to replace some of the units nearing the end of their useful life. Depending on how your lease reads, this might not be so clear.

This same idea relates to the roof. Earlier, we discussed how not all triple net leases are created equal. The roof is one of the items that can change depending on the kind of contract you have. Some people think that it is evident that the landlord is responsible for the roof. It is their building, after all. There are just as many landlords out there that think that the roof is the tenant’s responsibility. It is a triple net lease, after all. Read through enough contracts, and you’ll see there is no exact standard, though.

A great example is a global publicly traded life science company that we represent. We leased 100,000 SF and added 20 HVAC units to the roof to support our laboratory operations. Some landlords will want to keep all of these units at the end of the lease thinking that they add to the value of the property. Other landlords will want these HVAC units removed so that they do not have to pay themselves to remove the units as most companies that lease the property next will not need them. We may be willing to remove the ducting but shouldn’t have to remove the actual units.

When we signed a lease extension, we had been at the property for ten years and just signed a 13-year lease. The roof was 18 years old when we initially moved in. Although we have a triple net lease, we were able to exclude any roof replacement expenses from the contract. We do take care of all roof maintenance though. If you are reading this, you are mid-way through your lease so we can focus on reading and interpreting it with your team, broker, and attorney. I want to raise your awareness of this topic as we will be signing a new lease on a new building with a new roof soon, and we want to be conscious of how we handle that.

When it comes to the parking lot, some companies can be harder on asphalt and concrete than others. Some trucking operations are notoriously tough on asphalt trailer yards and truck courts. Imagine hot summer days with fully loaded trucks making slow tight turns on sticky asphalt. Imagine storing trailers with trailer stands dug into the asphalt day after day 1,800 days in a row. Concrete truck courts and trailer storage yards are ideal, but they are far from the norm. You may be responsible for replacing the entire parking lot, depending on the amount of damage to it. This replacement is going to be 2-3X more expensive than the simple slurry coat you may have in mind. You want to double check if that is something you are responsible to restore in your old building and something to be mindful in your new building.

You’ll have to remove your sign on top of the building and repair any damage done to the tilt-wall panel or facade once done. Sometimes you’ll be able to strike an arrangement with the landlord that you will take yours down with the same vendor as the new tenant so that someone only has to go up on a scissor lift once to do the work once. This simultaneous removal and installation are optimistic but frequently done on smaller warehouses.