April 12th, 2013, By Don Catalano
When a company needs new office space, generating a formal request for proposal (RFP) is a good first step. While many companies find space without creating an RFP, they are missing out on two key benefits. With an RFP in hand, brokers and landlords know exactly what the company needs and can tailor their offerings to suit those needs. In addition, the process of generating an RFP forces the company to create a strategy for the space that can then be expressed in the specific needs delineated in the RFP. While every company should create an RFP format that works for its needs, the documents frequently contain the same key components:
This statement makes clear what the company requires. It should be a brief summary of specifications for the space. Purpose statements also frequently provide brief descriptions of how vendors should respond to the RFP
Background information on the company behind the RFP helps landlords understand the type of tenant that they have the opportunity to attract.
This section, which is usually lengthy, describes the size of the space that is needed as well as the method of measurement. It should also describe the general area in which the building should be located as well as the quality level of the building and the amenities that are required. If the space should be already configured with certain features, like an ensuite restroom or reception area, this should also be included in this section.
Given that many office buildings have limited parking or charge for it, many tenants add a section to their RFP describing their exact parking needs to that the landlord can include that information in the pricing.
RFPs include timeframes for the lease such as the lease commencement date and move-in date. In addition, the RFP will indicate the tenant’s desired lease length as well as whether or not they need options to renew the lease.
While RFPs usually omit pricing, leaving that to the party responding to the proposal, they frequently include summaries of lease terms and other business points that the tenant company requires. For example, an RFP may include a list of operating expenses that the tenant is willing to pay and those that it expects the building owner to include with the rent. It may also include a list of tenant improvements that the tenant requires and a request for the landlord to propose a plan for who will pay for the improvements’ completion.
In addition to providing a general description of what the tenant needs from the building, the RFP frequently closes with a description of how the landlord should respond. The response description goes well beyond the brief summary in the purpose section at the beginning of the RFP, including the desired format of the response as well as the date to respond. Setting the format in which landlords can respond to an RFP might seem like an unnecessary step, but it makes the process of comparing all of the received responses much simpler than having to wade through multiple documents that are all completely different from each other.
The RFP process is formal and potentially time-consuming. It’s also extremely valuable both to help tenants clarify their thinking and to create a level competitive playing field for multiple landlords to come in and bid for a company’s tenancy.