Business & Legal Considerations for Nonprofits Selecting Office Space. Mack Heller & James Pitts

Transcription

1 Business & Legal Considerations for Nonprofits Selecting Office Space Mack Heller & James Pitts

2 Mission of Pro Bono Partnership of Atlanta: To maximize the impact of pro bono engagement by connecting a network of attorneys with nonprofits in need of free business legal services.

3 Pro Bono Partnership of Atlanta Eligibility & Other Information In order to be a client of Pro Bono Partnership of Atlanta, an organization must: Be a 501(c)(3) nonprofit. Be located in or serve the greater Atlanta area. Serve low-income or disadvantaged individuals. Be unable to afford legal services. Visit us on the web at We host free monthly webinars on legal topics for nonprofits To view upcoming webinars or workshops, visit the Workshops Page on our website Join our mailing list by ing rla@pbpatl.org

4 Legal Information: This webinar presents general guidelines for Georgia nonprofit organizations and should not be construed as legal advice. Always consult an attorney to address your particular situation Pro Bono Partnership of Atlanta. All rights reserved. No further use, copying, dissemination, distribution or publication is permitted without express written permission of Pro Bono Partnership of Atlanta.

5 Mack Heller James Pitts

6 Strategy Case Study Rent vs. Own 501 (c)(3) Leasing Purchasing

7 Strategy Case Study Rent vs. Own 501 (c)(3) Leasing Purchasing

8 Strategy

9 Strategy Cycle Culture Talent Real Estate Collaborate Services Employees Clients What Else?

10 Strategy Case Study Rent vs. Own 501 (c)(3) Leasing Purchasing

11 Owning Potential Benefits Level payment Chance of value appreciation Control of building Ability to lease to others Potential Risks Cost of Capital Debt ratio Maintenance & Repair Obsolescence Tenants Growth or decline in headcount Risk of casualty

12 Leasing Potential Benefits Less upfront capital Tenant improvement allowance is amortized into rent Less ownership headaches Owner responsible for repairs and maintenance in some cases Ability to grow or shrink Potential Risks Rent payments may escalate No upside appreciation Difficult landlord Termination of lease Inability to grow or shrink Landlord right to relocate

13 Strategy Case Study Rent vs. Own 501 (c)(3) Leasing Purchasing

14 Purchasing Timeline Due Diligence Closing Negotiation 2-3 months Buildout Search 1 month 3-6 months Occupy 2-6 months Connected

15 Purchasing Considerations Search Negotiation Due Diligence Buildout Occupy 1 Search Requirements Tours Analysis Decisions Offers Quotes

16 Purchasing Considerations Search Negotiation Due Diligence Buildout Occupy 2 LOI Appraised value Price Escrow Agent Due Diligence Conditions Earnest Money Entity

17 Purchasing Considerations Search Negotiation Due Diligence Buildout Occupy 3 Title Inspection Extensions Earnest Money Tenants Personal Property Phase 1 Zoning Other contingencies Physical Inspections Contracts Internal approvals

18 Purchasing Considerations Search Negotiation Due Diligence Buildout Occupy 4 Punchlist Access Self Perform CO Architect Permits Change Orders Quotes Finishes Moving Technology Relocation Furniture Communication Parking Services

19 Purchasing Considerations Search Negotiation Due Diligence Buildout Occupy 5 Insurance Occupy Unrelated Business Income Tax Trade or Business Landlord Physical Inspections Rebuild/Maintain Regularly carried on Not substantially related

20 Strategy Case Study Rent vs. Own 501 (c)(3) Leasing Purchasing

21 Leasing Timeline Lease executed Negotiation Buildout Search 1 month 3-6 months Occupy 2-6 months Connected

22 Leasing Key Concepts Search Negotiation Buildout Occupy 1 Requirements Tours Analysis Decisions RFPs Quotes

23 Leasing Key Concepts Search Negotiation Buildout Occupy 2 LOI Free rent SNDA Damages Stalking horse Tenant Allowance Relocation Default LL s Work Personalities Self Help Form lease CAM Insurance Renew Sublease

24 Leasing Key Concepts Search Negotiation Buildout Occupy 3 Punchlist Self Perform CO Access Technlogoy Architect Permits Change Orders Furniture Quotes Finishes Moving Communication Parking Services

25 Leasing Key Concepts Search Negotiation Buildout Occupy 4 Insurance Punchlist Keys Technology Repairs Key lease dates Furniture

26 Strategy Case Study Rent vs. Own 501 (c)(3) Leasing Purchasing

27 Case Study 90K $2M 4 40K

28 Before

29 Results $2M -10% 28K $3M

30 Case Study Attract Culture Tomorrow s Workforce Inspirational Engagement Space Collaboration Innovation & Teamwork Health, Well-being & Sustainability

31 After

32 Strategy Case Study Rent vs Own 501 (c)(3) Leasing Purchasing

33 Mack Heller James Pitts Thank You For Your Time

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35 For More Information: If you would like more information about the services of Pro Bono Partnership of Atlanta, contact us at: (404)