A Project Delivery Efficiency Model

By: John Gioioso, CFM, MCR

Efficiency Model Definition

• Created to provide a scientific approach to obtain project efficiency through operation, financial and human factors.

• The efficiency model can be used for real estate related transactions.

How Does It Work?• The model is based on real estate transactions for lease properties.

• Whether you have one property or several hundred properties in your portfolio, the model begins with a 24 month future look of the lease expiration date.

– Today’s Date October 18, 2016– Lease Expiration Date October 18, 2018

• Types of Real Estate transactions to apply this model to are:• New Location/Relocation to existing buildings• Built-to-suit• Renewal/Expansion-stay at existing property• Disposition-abandoned property to sublet or buy-out with landlord

Project Launch• Three (3) critical dates need to be managed during this process:

• Action date The date 24 months prior to the lease expiration date-Example, Oct. 18th, 2016

• Notification date Notice that is required to landlord if you are choosing to stay at a property or leave. The date is stated in the lease typically 9 months or a year notice to the landlord-1 year example, Oct. 18, 2017

• Lease end dateThe date the lease terminates-Example Oct. 18, 2018

• There are four (4) areas that contribute to delivering a project in the 24 months or less:

• Project Identification

• Real Estate

• Design Development

• Construction

Project DeliveryProject Identified Real Estate Design Development Construction

• Project definition form• Establish project team• Develop strategy• Develop timeline • Management approval

• Site search • Facility condition

assessments• Financial analysis• Develop project budget • Legal documentation• Executive approval and

Board review

• Validation – design & review

• Design coordination• Construction documents

• Competitive bid process• Permitting • Construction

management • Furniture/

fixtures/ equipment procurement

• Move management

Typical Delivery Timeline

2 Months 3 Months 4 Months 15 MonthsTotal

24 Months

Efficiency Gains• By obtaining accurate headcount and FF&E information, the project definition will focus business leaders

to provide headcount (existing and growth), all FF&E required, and any special space needed (like a training room in a lab) and will minimize change orders.

• Time Line Development to provide less likelihood of delays and keep project moving in the right direction.

• Three levels of Facility Conditions Assessment:

• Property 5 years and under A cursory review

• Property over 5 years A formal facility condition review

• Deep dive property Review if facility condition review indicates major infrastructure problems

Knowing this information before negotiating with a landlord will gain savings that are actual and cost avoidant.

Efficiency Gains Cont.• A detailed project budget provides two components that will be combined:

Construction cost + FF&E cost = Total cost of project (capital dollars)

• When the following Design Development process drawings are prepared for a project, efficiencies are ensured that a complete bid package is consistent with program requirements.

• Test Fit Program information fits a space you are selecting

• Schematic Preliminary layout of the program

• Design Development Final drawings to lay out ceilings, electrical, data and FF&E

• Construction drawings Permit set drawings that are detailed to the scope of the project, prepared for bid process, and used to apply for building permit

Efficiency Gains Cont.• Construction bid process- Competitive process to ensure scope of work is being

compared “apples to apples”. Ideally, three (3) qualified general contractors. Major efficiencies are recognized with cost avoidance.

• Procurement- FF&E competitive bid to obtain the same efficiencies method as the construction bid process.

Remember: Project Delivery is a process. Planning and oversight of the model is key to obtaining the maximum cost, operation, and satisfied users.

Questions/Answers

Contact Information:John Gioioso, CFM, MCR

Senior Director, Corporate Building Operations & Real Estate

Fresenius Medical Care North America

920 Winter Street

Waltham, MA 02451

Direct: 781-699-4383

Mobile: 781-789-5468

John.Gioioso@fmc-na.com