Burt M. Polson - Commercial Real Estate Broker

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It pays to know your building

I was recently involved with a lease for a new convenience grocery store. As part of the lease the owner was to provide improvements to the space for the tenant. Unexpectedly, a simple improvement ended up costing the landlord over $20,000.

The tenant needed 3,000 square feet of space. Two units were available, 1,800 square feet and 1,200 square feet, in the shopping center. They happened to be adjacent to each other with a simple demising wall between the two - so we thought.

The landlord had planned to remove the demising wall and combine the two smaller units into one 3,000 square foot unit. This was exactly what the tenant wanted so they signed a five year lease with three options to renew of five years each - a total of 20 years. This is a worthwhile tenant for a landlord so he was willing to invest a little bit of money into the space by removing the wall.

This is usually a simple procedure, but after obtaining permits and starting demolition the contractor finds the demising wall to actually be a two-hour fire rated, load-bearing wall. This means the wall is engineered to actually support the roof and structure and serve as a kind of fire break between parts of the building. Many commercial shopping centers have perimeter walls made of concrete or block with the interior walls separating the tenants made of wood or metal studs and sheetrock.

Load-bearing and fire-rated walls are common, but was not expected at this location in the building so everyone was surprised. After consulting with an architect, engineer and city building staff we learned we had to re-engineer the wall. This meant we had to install a large beam, three steel posts and concrete footings in order to just remove a portion of the wall. Additionally, we also had to create a new fire-rated wall out of a regular demising wall.

The new fire-rated wall was created by installing an additional set of studs and two layers of sheetrock on one side. Being there was a dental office next door we were restricted on what we could do on that side. So all the work took place on the new tenant’s side. Unfortunately, we still had to interrupt the dental business to install five feet of sheetrock to the bottom of the roof joists as part of the fire code. This was a mess as we had to remove part of their ceiling.

After an additional delay of approximately two months, the work was completed and the space turned over to the tenant.

Several lessons were learned, first, building owners need to have a set of architectural drawings available of their building and have a grasp of the basics on how to read them. Second, sometimes it pays to hire a contractor to do some investigative work even if it costs a few hundred dollars beforehand. In my client’s case it would had saved him over $20,000.

An ACRES Real Estate Services, Inc. Company