Who Should Manage Capital Improvement Projects?
Several options exist for how to manage a capital improvement project. Before we look at each option, let’s clarify the term: We define “capital improvement” as changes that improve, enhance or prolong the life of a building or real estate. This type of work is different from routine maintenance like replacing light bulbs or repairing broken faucets.
Given this definition of capital improvement projects, who should manage them? Maybe it won’t surprise you, but it depends. The first question to understand is whether you have somebody already on your team who has the knowledge and capacity to focus on the project(s). The second factor to evaluate is your level of risk tolerance for the work getting done on time and within budget.
Do It Yourself
One option is for your own staff to lead the project. This approach often works for something that is straightforward and needs to be done once. Imagine a physician’s office that needs to be refreshed with new carpeting in the waiting area and painting throughout the office. The office manager could identify contractors, select materials and arrange for the painting to be done and the carpet to be installed during times when the office is closed to minimize impacts to patients and employees.
Although this renovation project falls into our definition of work that improves the real estate, it would probably be expensive overkill to hire a separate project manager to tackle it.
Alternatively, upgrades could be managed by the property manager or building engineer. This might be more appropriate if other spaces and common areas throughout the building (not just the physician’s office) were to be renovated. The property manager could hire a contractor to do all of the work with economies of scale and coordinate what order to do the spaces.
Putting the property manager in charge may also be the best approach when work requires day-to-day or even hour-by-hour communication with tenants. For instance, if an owner desires to modernize the kitchens and / or baths in every apartment unit, scheduling workers and deliveries and signing off on completed tasks would involve careful coordination with each resident whether they are at home or at work.
When is the property management option not ideal? If the owner or property management has no staff time to devote to the project, if the staff isn’t experienced in improvement projects, or if managing the project would mean the staff’s “real work” of caring for the building and keeping tenants happy gets shortchanged. Asking them to take on a challenging project could prove unsuccessful. In addition, with more complicated capital improvement projects, putting responsibility onto the property manager’s plate could cause expensive and time-consuming problems that damage your business’s reputation.
Frequently, capital improvement projects (and programs of work throughout one property or many locations) come with a lot of risk in terms of time, money, reputation and quality. And so the two approaches previously outlined just won’t work. Time to pull in the pros. Professional project managers understand how to track and move many resources to completion while identifying and mitigating risks.
Consider a project Real Projectives® worked on recently for a client whose small office building had a leaking facade. The owner talked with the property manager for over a year. They did some inspections and obtained a couple repair bids, but still couldn’t decide on how to best address the issues. Replacing all the windows and tearing down brick walls seemed expensive and could possibly create more problems. It wasn’t clear where repairs should begin and end. Time was being wasted. Leaks were damaging the looks and operation of the office and, on top of that, were making it difficult to lease to new prospective users. The project was mired in indecision and frustration. The owner needed a fresh set of eyes and somebody they could trust to shepherd a path forward, so they engaged Real Projectives®.
As standard practice, we began with clarifying the root of the problem and understanding all related impacts. Next, we reviewed the studies and proposals obtained over the prior couple of years. Then, we helped the owner better assess the existing conditions and evaluate pros and cons of alternative solutions. After only a few short months of our involvement, the team decided to reseal and re-caulk around all of the windows and make strategic repairs to the existing brickwork and underlying flashing — completed within less than a year and for about half the budget once anticipated. As project managers, we devised a game plan and drove it to the finish line — making everyone happy.
Capital improvement projects, particularly large or complex ones, often require management and coordination that is knowledgeable, dedicated and focused. Selecting the most appropriate leader can be the most crucial decision you’ll make to the success or failure of your project, so please take a few moments to consider your options.
Are you facing an important capital improvement project and not sure who should manage it? We’d love to discuss how we could help. For more information on the services we offer clients, browse some of our other articles — or give us a call at 888.357.7342.