RFPs, handling knowable unknowns with no time

As user rep brokers and facility consultants, we try to standardize specifications in a property search and create a competitive environment among selected developers for our clients/users. In some cases where an industrial property search is underway in an area where transporation costs limit the number of sites for consideration, we opt to control the best site and then allow a number of developers to quote on the same building. Under this scenario, we prefer to control the RFP process as follows:

When you are faced with one site and multiple developers (good situation) and there is not a great deal of geotechnical info on the site, etc., we attempt first to place the site under contract with the ability to assign to the winning firm. To handle the isssues of site developement costs in the RFP, we determine a budget number for all developers to assume in their proposals. Although there are many unknowns with any particular site, we investigate local construction projects underway or completed recently to gain an understanding of area site development costs. From this review, we place a site development allowance in the RFP along with a description of what is included and excluded for proposal purposes. In addition, we provide from the land contract, the approximate acreage and cost/acre. From this, all the developers will have the same assumed land and site development cost for the first round of proposal submissions.

In addtition to the land cost and site development allowance, we mention in the RFP our process of determining the actual site costs and having a process the change the final negotaited lease rate to reflect the actual cost of site developement. We clearly state in the RFP the site development work will be bid to area subs with oversight by our firm and our client. When the actual cost is determined, the lease rate is to be adjusted to reflect extra cost over allowance or savings based on pre-determined amortization.

Rodger West

Alliance Partners, Inc.

Corporate Planners & Real Estate Consultants

770-355-9279