How We Add Value to the Co-Op and Condo Board Renovation Process
Many of the region’s most well-known and best-loved residential buildings are considering plans to update their amenities, redesign their lobbies, or refresh their curb appeal. However, managing a successful renovation project is no easy task.
From our years of repurposing and reinvigorating multifamily properties in New York and New Jersey, Steven Kratchman Architect, P.C., has seen first-hand the difficulties faced by co-op and condominium boards. At almost every board meeting, we have heard someone say, “We have a multi-million-dollar renovation budget, but most of it ends up going to unseen, back-of-house repairs. We need expert guidance on how to spend the money wisely and get the most bang for our buck.”
That’s where we excel. From designing affordable solutions and gaining shareholder buy-in, to managing schedules and deadlines, it takes an experienced and visionary architect to help ensure that your project maximizes your budget, runs smoothly, and achieves the desired results. For co-op and condominium boards that are considering renovation projects – no matter the size or scope – the following summary of best
practices is a must-read.
Renovation Best Practices for Co-Op and Condo Boards:
Q: When co-op and condo boards are considering project renovations, what is the first step they need to take?
A: Poor communication between board members and between the board and shareholder communities is one of the biggest stumbling blocks when it comes to project planning.
Transparency is critical to the success of any renovation project, along with creating a general consensus of the project goals. But before agreeing on goals, there must be a shared understanding of the reality of existing conditions.
For example, if there is no consensus that the traffic in front of the building is too fast and dangerous, no one will be interested in hearing about – or spending money on – solutions to slow the traffic.
- Within the board, there needs to be leadership and a general consensus of the project’s parameters.
- The board and the shareholders/community must also be on the same page.
- Clashes often occur over the importance of front-of-house projects (amenities/curb appeal, lobbies, fitness centers, landscaping) versus back-of-house projects (maintenance issues, generators, windows, façade repair, roofs).
- It is unlikely that the entire community will be in agreement, but there needs to be a shared understanding, even at an emotional level, of what works and doesn’t work on the property.
Q: What is a common mistake that co-op/condo boards make as they begin the project planning process?
A: The most common mistake we see is shareholders blocking their observations and goals with their own cost estimates.
“We can’t afford this” and “This is too expensive” are common refrains that are often based on inaccurate estimates and lightning-quick evaluations of what can and can’t be done.
Board members and shareholders often have little or no real estate, design or construction experience. They may be unfamiliar with the project planning process, actual costs, or the creative solutions that can help get projects off the ground. In addition, shareholders tend to focus on a specific short-term project or projects without developing an understanding of the bigger picture.
Q: Regardless of the immediate renovation desires, is there a tool that boards can use to ensure they have a sound, long-term approach?
A: It is important for the board to develop a conceptual “Master Plan” of goals and projects showing the logical construction sequencing.
A Master Plan allows shareholders to embrace a long-range vision, understanding how some projects must be phased over time while others need to be ranked hierarchically. This can address trends in living, how to remain competitive, appealing to a wide range of residents, the “branding” of the property, and much more. That way, future renovations will have a strong guide to follow to help residents and subsequent boards find success.
Master planning can also add tremendous value from a financial perspective. For example:
The average sales price per-square-foot in building A is $1,000 but the neighbor’s building B is getting $2,000 per-square-foot. If there are 300 units with an average size of 1,500 square feet in both buildings, this means that $450 million of value is theoretically available to building A (or had been “lost” in building A).
If a building A project can be created with an investment of $10 million that increases the average value of the unit by 20%, then each unit will increase in value from $1.5 to $1.8 million. This is a gain of $300,000 per unit, but with an investment of only $3,333 per unit.
Q: Why is it worthwhile for a co-op/condo board to invest in hiring a dedicated professional to manage a renovation or redesign project?
A: In our experience, effective renovation management is critical to a project’s success.
Both architects and construction project management professionals are educated, certified, and experienced individuals who can help clients get a project done. In cases where boards and property managers lack these advanced skillsets, jobs often stall. It is essential that clients understand that the value of a project includes both the value of the investment and the means to achieving its success.
Let’s break down the process:
On the design side, there are architects and interior designers, who will create the renovation vision for your property.
Once a design intent has been established, engineers and specialty consultants can be retained, such as structural and civil engineers; mechanical, electrical and plumbing specialists (MEPs); acoustic lighting technicians; subsurface specialists; or whomever a project requires.
Project managers and owner’s reps can be hired on Day 1 or once the client agrees that assistance is needed. They will manage the process, timeline, and professionals and tradespeople required.
Some helpful tips:
At least one point person on the board should manage a project from beginningto end. Some boards select members that have specific real estate or project management experience.
Multifamily properties often have an experienced property manager assigned to handle facilities and staff. However, project management is not typically in their job description.
Boards and communities may develop ad hoc house committees that can serve as project managers rather than hiring paid professionals.
Owners’ construction representatives can be retained by the board to represent them if the board has sufficient budget for this.
Many boards have heard horror stories about projects going bad. However, these projects are often set up to fail. For example, an architect’s tried and true process has checks and balances built in. If they are not followed, things can go sideways. Working with an experienced professional can help communities avoid this.
Q: When it comes to project planning, what role can an architect play in helping to facilitate better communication, understanding, and agreement between co- op/condo boards and shareholders?
A: An architect with experience working for boards is an objective, third-party expert who knows how to prepare for presentations, conduct meetings with dissenting opinions, and achieve consensus.
- A skilled architect can explain project goals, potential problems, and solutions in detail.
- By making drawings showing existing conditions and proposed concepts, then putting them on the wall or screen in front of viewers simultaneously, the architect will demonstrate an objective interest in facilitating engagement and discourse.
- The architect ensures that all voices, opinions, and concerns are heard.
- Also of great importance, the architect will act as the facilitator and handle any opposition, helping the board from being in an awkward or defensive position.
Q: What are some of the tools architects use during the design process that can be adapted for communication purposes?
A: Diverse community constituencies require diverse avenues of communication.
Some people respond to in-person presentations with materials they can touch and feel, while others prefer self-guided digital versions. We have a number of physical and digital tools that can be effective for communicating project concepts to shareholders.
The design process relies on visual tools such as renderings, models, images, etc., that can be repurposed to communicate concepts to shareholders. For example:
Three-dimensional sketch overlays blending computer renderings with real materials and natural and electric lighting.
Captions and narratives that describe design solutions and options which can change as the designs reach higher resolutions.
Digital tools can include:
Monitors showing a slide show on a loop placed in the lobby and/or near the elevators
Walk throughs and fly-overs, that are two-dimensional plans, elevations, and sections