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Franklin Street Completes $14M Hotel Construction Project on Fla. Gulf Coast

Franklin Street, a full-service commercial real estate firm, has completed a 15-month construction management project for a newly-built, 88-key hotel in Dunedin, Fla., which opened on June 20, 2019.  The firm’s Project Management group oversaw every aspect of the $14 million state-of-the-art waterfront hotel, which will carry a Hampton Inn and Suites flag. 

Franklin Street was hired by AV Florida Hotel, LLC to serve as project manager for the property at 2641 Michael Place. The firm’s responsibilities included project planning; design management; furniture, fixtures and equipment coordination; construction management; procurement management; and budget and schedule management. 

Franklin Street’s project management team, spearheaded by Patrick McGucken out of the Tampa office, also communicated regularly with the property owner and design team to explain all required consultant services and to closely manage project costs and schedules. The new Hampton Inn Dunedin features spacious guest rooms with private balconies and ocean views, 24-hour business center, meeting room, fitness center and an outdoor saline pool. 

“With this construction project, AV Florida Hotel, LLC has established Hampton Inn’s prominence as one of the prime hotel lodging properties in this area of the Gulf Coast, providing much needed hotel rooms within close proximity of Honeymoon Island State Park,” said Franklin Street’s McGucken, vice president. “The client was impressed by Franklin Street’s ability to make this project a reality by collaborating across various business lines and bringing added value to their asset. Our team is proud to have partnered with them on this project.”

In addition to overseeing project management for the ground up construction of the hotel, Franklin Street Capital Advisors arranged debt and equity development financing for the project. Franklin Street Insurance Services also provided the builder’s risk and general liability insurance policies, while Franklin Street’s Landlord Representation team works to find a restaurant tenant for the remaining outparcel.

Hampton Inn Dunedin is located minutes from some of the Florida Gulf Coast’s most beautiful beaches. The property is just a 10-minute drive from beautiful Honeymoon Island, where guests can take the ferry to the pristine sands of Caladesi Island. The hotel is also close to several local restaurants, microbreweries and Dunedin Stadium, home of the Toronto Blue Jays spring training.

About Franklin Street: Founded in 2006 during one of the toughest real estate climates, Franklin Street focused on delivering value-added solutions to meet the evolving needs of clients. Through a collaborative philosophy of leveraging the resources, expertise and experience of each of its divisions – Investment Sales, Tenant and Landlord Representation, Capital Advisory, Insurance, Property Management and Project Management – Franklin Street offers unmatched value and optimal solutions for clients nationwide. Learn more about Franklin Street at FranklinSt.com.

 
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4 Ways Project Managers Can Improve Your Next Build-Out and Reduce Costs

If you are a landlord or tenant looking to complete a build-out for a new commercial space, then you should strongly consider hiring a well-qualified, experienced project manager to supervise the project. Some commercial property pros think that they can smoothly coordinate a complex build-out while still handling their regular everyday jobs, but my years of experience say otherwise. Project managers are problem solvers. The earlier you can bring them into a project, the better the results. Franklin Street’s T. Scott Williams, an award-winning construction management veteran, shares four ways that using project management services will benefit your commercial renovation job.

1. Keep project on schedule. Project managers keep track of contractor bids, building permit requests, architectural drawing approvals and construction site reviews so you don’t have to. As the project leader, he/she will keep track of things like what date a tenant needs to move into the space before they will be forced to pay a holdover fee. A reliable project manager will make sure that a tenant never winds up paying for rent at two different places simultaneously because of a construction delay. On the landlord side, a project management team can serve as a full construction department for the landlord. The team will also confirm that any lease obligations to commence rent are met on time.

2. Prevent cost overruns.  Project managers will work with all parties involved to speed up a timeline if needed when a critical date is approaching. This is key to keeping your project on budget because a holdover fee can run anywhere from 100 to 250 percent of the rent. If you’re a landlord, a project manager will help you obtain the proper permits and construction pricing, which in turn helps you in properly pricing the tenant improvement allowance. For tenants, a project manager can provide the total costs involved based on the location selected, which will be crucial in helping you determine which space works best for you financially.

3. Select the best vendors. Project managers often work with general contractors and architects from national firms, so they can quickly gather a qualified vendor list to choose from. They can also perform due diligence on all potential vendors from anywhere in the country. Choosing the wrong vendor for a project could increase your costs by up to 50 percent. Therefore, it is wise to have an expert who will control the bidding process and ensure you will hire the most qualified firm for the best price possible.

4. Fix problems. Project managers can lower your costs significantly by finding and correcting problems early in the process. During a recent project, our client’s architectural drawings called for the construction crew to core drill concrete in a floor above an open mezzanine.  It was quickly decided that the core drill would not work as originally envisioned. Having a project manager on-site allowed us to quickly find an alternate solution by utilizing a faux column, which helped us avoid submitting a request for information (RFI) to the architect that would have incurred additional costs. These are the kinds of issues that a knowledgeable project manager can often resolve easily to avoid unnecessary expenses.

Bringing more than 15 years of experience in commercial real estate, T. Scott Williams serves as General Manager for Franklin Street, specializing in commercial property operations, client relations, capital improvement project oversight, leasing planning, and project management.  He can be reached at scott.williams@franklinst.com.

About Franklin Street: Founded in 2006 during one of the toughest real estate climates, Franklin Street focused on delivering value-added solutions to meet the evolving needs of clients. Through a collaborative philosophy of leveraging the resources, expertise and experience of each of its divisions – Investment Sales, Tenant and Landlord Representation, Capital Advisory, Insurance, Property Management and Project Management – Franklin Street offers unmatched value and optimal solutions for clients nationwide. Learn more about Franklin Street at FranklinSt.com.

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How to Fight Rising Retail Construction Costs

Construction and labor price increases are having a dramatic impact on the national retail market. Franklin Street’s Cary Beale, senior vice president of Retail Landlord Services, and Nick Sanfilippo, senior vice president of Project Management, recently shared their expert insights on how retailers and developers can fight back.

Developers are seeing rising costs for land, materials and labor. Will this trend continue in 2019?

Sanfilippo: Absolutely, and we are seeing this in every region of the country. We are experiencing a very busy construction market which continues to drive increases in materials and labor. We’ve been witnessing a steady increase in building costs since 2013 and year over year they have been rising. There is a healthy development pipeline already lined up for 2019. The high demand will continue to keep constraints on the skilled labor market as well as a continued rise in material prices. This trend is happening consistently across the country and in all market segments, ranging from new construction to retail and office buildouts. We diligently track these trends and have yet to see any signs of things slowing down. 

What are some common causes for cost overruns on commercial real estate construction projects?

Sanfilippo: The most common cause for cost overruns is having a poorly planned project. If a project is planned properly from the beginning, this will significantly limit overages. Some common causes for overruns include a poorly defined scope of work, improper or unrealistic budgeting, not executing a detailed and accurate set of construction drawings, as well as failing to implement diligent construction management. 

How have these high costs impacted retail landlords?

Beale: The main challenge with higher construction costs is with new construction and tenant build-outs. Due to the elevated costs, retailers are now asking for additional tenant improvement allowance to help them cover their build-out expenses. In most cases, landlords will try to raise the rental rate per square foot to make up for the additional allowance the tenant is being provided. Landlords are generally more selective about doing deals when they are offering tenants significant leasing incentives, which can include free or reduced rent, or up-front cash payments for items like moving expenses or improvements.

How can project managers help builders reduce their costs?

Sanfilippo: Construction projects are dynamic ventures that involve risk and many unknowns. An experienced project manager knows how to mitigate and navigate these challenges. Any scope creep or cost increase can quickly escalate and derail a project. A skilled project manager knows what obstacles to look out for and always has a strategic plan to handle them.

For example, we had a client that was wanting to do some major exterior patio work for their restaurant. The client already had their drawings completed when they hired Franklin Street for the construction project management. Thankfully, we caught the drawings prior to permit submission because the way the patio was designed would have triggered a land disturbance permit. The process for this permit was four to six months and would have required the older building being brought into current energy code compliance. With our input and redesign, we saved the client in excess of $100,000 and four months on their schedule.  

In what ways can brokerages offer added value for retail tenants and landlords facing higher build-out costs?

Beale: Landlord brokers can add value through their relationships with quality tenants that can fill available space quickly if it is the right fit.  The best brokers pride themselves on knowing the local market and helping companies find the most profitable spots for their specific kind of business. They attract credit worthy tenants to the owner’s property and negotiate above-market rents. Full-service firms like Franklin Street also provide other value-add services such as in-house property marketing, property management, and construction supervision.

As Senior Vice President of Franklin Street’s Retail Landlord Services division, Cary Beale focuses on overall strategy for the division, talent recruitment, along with supporting business development efforts across all Franklin Street offices. Mr. Beale has more than 20 years of experience providing customized landlord and tenant real estate services for retail and restaurant clients throughout the United States. Reach him at Cary.Beale@FranklinSt.com. 

Nick Sanfilippo serves as Senior Vice President of Project Management for Franklin Street. In this role, he provides comprehensive project management and consulting services for both investor and occupier clients while leading the project management division across all markets. He has more than 15 years of experience in building and leading project management teams, consistently creating value for his clients ranging from tenant build-outs, to redevelopment projects, to new developments. Reach him at Nick.Sanfilippo@FranklinSt.com

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Cody Johnston Joins Franklin Street as Project Manager in Atlanta

Franklin Street, a full-service commercial real estate firm, announced today that Cody Johnston has joined the company’s Project Management division as a project manager.  In this role, Mr. Johnston will provide comprehensive project management and consulting services for both investor and occupier clients throughout the southeast. He will work in the firm’s Atlanta office alongside Nick Sanfilippo, senior vice president of project management. Mr. Johnston brings nearly a decade of experience in structural engineering and construction management for adaptive reuse, retail, and office projects. 

Most recently, Mr. Johnston served as assistant project manager for The Beck Group in Atlanta, where he was responsible for the overall direction, completion, and financial outcome of multiple, concurrent projects ranging from $5 to $15 million in value. Mr. Johnston previously worked as a regional engineer for The Reinforced Earth Company and managed more than 25 projects over five states simultaneously, with as much as $30 million in combined value. He was selected for the firm’s leadership development program and represented the company in Paris, France at the Junior Managers Seminar.

“We are really excited to have Cody on board,” said Sanfilippo. “Franklin Street’s Project Management division is rapidly expanding to service our client’s needs, and with Cody’s expertise and positive attitude, he is ready to be a part of the team and hit the ground running.” 

Mr. Johnston is a member of the Urban Land Institute, Associated General Contractors of America, and American Society of Civil Engineers. He also volunteers locally at Peachtree Presbyterian Church, Habitat for Humanity, and Bike Roswell. Mr. Johnston earned a master’s degree in business administration from the University of Georgia and a bachelor’s degree in civil engineering from Virginia Tech University. He is eligible for a Professional Engineer license and Project Management Professional (PMP) certification.

About Franklin Street: Celebrating more than 10 years in the business, Franklin Street is a family of full-service commercial real estate companies focused on delivering value-add solutions to meet the evolving needs of clients. Through a collaborative philosophy of leveraging the resources, expertise and experience of each of its divisions – Real Estate, Capital, Insurance, Property Management and Project Management – Franklin Street offers unmatched value and optimal solutions for clients nationwide. Learn more about Franklin Street at FranklinSt.com.

 
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Class Notes: Nick Sanfilippo

Excerpted from Terry, the magazine of the University of Georgia College of Business.

Nick Sanfilippo (BBA ’02) of Brookhaven was named SVP of Franklin Street’s project management division. He was previously director of tenant coordination project management at DDR Corp.

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The Perfect Answer to Your Retail Build-Out Needs

Nick Sanfilippo, Senior Vice President of Project Management, explains how Franklin Street’s project management services can make life easier for retailers.

What is project management?
Project management refers to construction project management. From small interior build-outs to large scale developments, we have the expertise to handle any construction-related requirements. Our project management team offers a variety of services such as cost estimates, property redevelopments and first class advisory services.

What value can project management bring to retail clients?
On the tenant representation side, we can manage full roll-out packages and can build-out entire retail spaces, for any store quantities from one to 20+. On the landlord side, our team can serve as a full construction department for the landlord. My job as a project manager covers all aspects of the construction process, including hiring an architect to design the project, expediting the permitting process, bidding the project, hiring a general contractor and overseeing the building process.

Where does project management lie in our life cycle of services?
Project Management can come into play at any stage of the life cycle. The earlier we are brought into a construction project, the more we can help ensure a project’s success. A project manager can advise a property owner on building design and the best route to take to ensure a cost-efficient result, for example. Our team can save landlords a significant amount of money and time. Let’s say a landlord only has one space available, but they have three tenants interested in that space. We can advise the owner on which tenant improvements will be most costly and which one will bring the most cost-effective use. If they choose to redevelop the center, our team can manage the construction work on that project. We provide customized project management services to retail, office or industrial clients across all 50 states and Puerto Rico.

Nick Sanfilippo serves as Senior Vice President of Project Management for Franklin Street. In this role, he provides comprehensive project management and consulting services for both investor and occupier clients while leading the project management division across all markets. He has more than 15 years of experience in building and leading project management teams, consistently creating value for his clients ranging from tenant build-outs, to redevelopment projects, to new developments.
Nick.Sanfilippo@FranklinSt.com

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Blame The Labor Shortage For Rising Construction Costs Continuing Into 2018

As the number of construction projects across the U.S. continues to rise, so does the price tag for these developments.   

One of the main drivers behind soaring costs has been the growing construction labor shortage. Proposed national infrastructure projects and continued demand from the private sector could put national shortages at over 1 million tradesmen. 

“Construction costs for raw materials are not really rising,” Franklin Street Senior Vice President of Project Management Nick Sanfilippo said. “It is really the labor force that is driving prices.”

Sanfilippo provides project management and consulting services for clients on projects ranging from tenant build-outs to new developments. As the volume of construction projects has risen nationwide, he has seen contractors become more selective in choosing their projects because of the lack of sufficient labor. More than one-third of contractors have been forced to turn down jobs.

An aging workforce has worsened the shortage. Millennials have avoided vocational and trade schools. About 27% of millennial women and 21% of millennial men have completed a bachelor’s degree, versus 17% of baby boomer men and 14% of baby boomer women. 

Perception is part of the problem. A recent survey of 18- to 25-year-olds from the National Association of Home Builders revealed only 3% of young people were interested in pursuing construction as a career. Most surveyed wanted a less physically demanding job.

They could be missing out on a major economic opportunity for stable job growth and income.

“Right now, construction is a very lucrative business,” Sanfilippo said. “There is a perception of the industry as not being a very attractive field, but there is a lot of money to be made. Once the younger talent sees the gold mine, their interest will shift to it.”

The ongoing battle between union and nonunion workers also factors into rising construction costs. While some cities and states require the use of union workers on construction projects of a certain size, contractors have turned to nonunion labor as a cost-cutting measure. 

In Atlanta, the West and Midwest, nonunion work is more prevalent than in the North, Sanfilippo said. But developers still rely on skilled workers to handle more specialized jobs like mechanical and electrical work. Despite the growing market share of nounion labor, proper training and education continue to be major hurdles. 

Annually, labor costs have increased by 1.9% to 2.9%. Sanfilippo sees no sign of that plateauing in the near future. Developers should lean on existing relationships with contractors to get the best price in a tight market.

Having a project manager who knows how to leverage both analytical and interpersonal skills helps. 

“If you have a relationship with a contractor, they are going to give you preferred pricing,” Sanfilippo said. “A talented project manager is also essential. Simple things like paying your subcontractors consistently keeps them on the job, drives schedules faster and keeps things cheaper.”

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NEWSMAKERS: Nick Sanfilippo

Franklin Street has appointed construction management veteran Nick Sanfilippo as senior vice president of its project management division based in Atlanta.

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Franklin Street Names Nick Sanfilippo to Lead Project Management Division

Franklin Street is pleased to announce the appointment of construction management veteran Nick Sanfilippo as senior vice president of its Project Management division based in the company’s Atlanta office. Sanfilippo will direct comprehensive project management and consulting services for both investor and occupier clients across all markets and product types, including retail, office, industrial, and multifamily.

“WE’RE THRILLED TO WELCOME NICK AND HIS WEALTH OF COMMERCIAL REAL ESTATE CONSTRUCTION EXPERIENCE TO OUR INCREDIBLE ATLANTA TEAM,” SAID KURT KEATON, PRESIDENT OF REAL ESTATE SERVICES AND MANAGEMENT SERVICES FOR FRANKLIN STREET. “HE WILL PLAY A KEY ROLE IN LAUNCHING A NEW BUSINESS LINE FOR FRANKLIN STREET AND WORKING WITH OUR CLIENTS STEP-BY-STEP AS THEY EVOLVE AND EXPAND. IT’S A GREAT TIME FOR INVESTMENT AND DEVELOPMENT IN COMMERCIAL REAL ESTATE, AND WITH NICK AT THE HELM, OUR PROJECT MANAGEMENT TEAM IS IN THE RIGHT POSITION TO MAKE AN IMPACT.”

Before coming to Franklin Street, Sanfilippo was a director leading a team of project managers at DDR Corp., where he successfully completed projects totaling over $120 million and nearly two million square feet of tenant build-outs across multiple markets and project types. He has more than 15 years of experience in building and leading project management teams, consistently creating value for his clients ranging from tenant build-outs to redevelopment projects to new developments.

Having worked with top national and local retailers including Bed Bath & Beyond, Ulta, Ross, Chipotle, TJX Companies and more, Sanfilippo has a vast knowledge of the current retail market with experience across the real estate pipeline, from preconstruction and construction operations expertise to final cost analysis.

Franklin Street’s real estate team is nimble, smart and efficient, while making a significant mark on commercial real estate here in the Southeast and beyond,” said Sanfilippo. “I’m thrilled to join this company and forge a new path with this highly motivated team. It’s a truly exciting time to be in the industry and create tremendous value as we work in-step with our clients, especially as the current market conditions are ripe for our clients to expand.”

Sanfilippo is a prominent member of the International Council of Shopping Centers (ICSC), the Buckhead Club, and the Association of Young Real Estate Professionals. He currently serves on the ICSC Next Generation Chair Committee. Sanfilippo earned his bachelor’s degree in Business Administration from the University of Georgia and a Master’s of Business Administration in Real Estate from Georgia State University. He is a licensed real estate salesperson in Georgia.

About Franklin Street:
Celebrating more than 10 years in the business, Franklin Street is a family of full-service commercial real estate companies focused on delivering value-add solutions to meet the evolving needs of clients. Through a collaborative philosophy of leveraging the resources, expertise and experience of each of its divisions – Real Estate, Capital, Insurance, Management and Valuation – Franklin Street offers unmatched value and optimal solutions for clients nationwide.

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Franklin Street Brings In JLL Heavy Hitter

ORLANDO—Franklin Street is continuing to beef up its commercial real estate ranks in its new Orlando office. The firm just added T. Scott Williams as general manager in the office and industrial division.

“Scott is an extremely strong operator who gives building owners confidence that their assets are being well taken care of,” says Melissa Hazlewood, vice president of property management in the Orlando office for Franklin Street. “With his experience and talent, I believe he will be a critical element to us winning even more management contracts in Central Florida.”

Williams brings over 15 years of commercial real estate experience in property operations, client relations, leasing management, and construction management to Franklin Street. He comes to the firm from JLL, where he served as vice president and group manager in Florida and was responsible for management and building operations of approximately 1.2 million square feet of class A office in Orlando.

“The Central Florida office market is very tight right now for those looking for large blocks of space,” Williams tells GlobeSt.com. “Rates are up, but not enough to justify new construction that would make those larger spaces available.”

Prior to JLL, Williams managed multiple class A-plus properties in Washington, D.C., Maryland and Virginia. During his career, he has successfully completed more than $18 million in capital improvements for a variety of clients.

“Over the next few months, we expect to see cap rates push closer to the national average, but it still remains to be seen if they will be enough to warrant new development,” Williams says. “We are in a bit of a holding pattern so we are helping our clients navigate through this time. For smaller spaces, leasing activity is strong and steady.”

Williams has earned several management excellence awards including the highly coveted “Office Building of the Year” Award given the Building Owners and Management Association ands out annually.  Last year, JLL named him property manager of the year. Williams earned his Bachelor of Science in Communications from Old Dominion University in Norfolk, Virginia.

“In addition to his strong operations and client management skills, Scott also stands out for his ability to oversee building construction projects,” says Hazlewood. “He has significant experience in project management which makes him very valuable to us. I fully expect we will use him across our platform, managing building projects for our retail and multifamily clients in addition to office and industrial properties.”

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