New Lease (for Offices & Warehouses) Service
All leasing and design services requested for new leases will be funded through a Project-Based Fee. This is based on the square footage of the space requested, at either the hourly reimbursable rate or the commission rate of 2.5% of the total value of the lease.
The fee schedule is:
|Size||Project Based Fee|
|1 - 5,000 square feet||Hourly plus expenses|
|5,001 - 10,000 square feet||At the discretion of the Assistant Director, Real Estate Services, either an hourly fee or commission at 2.5% for years 1-5 of the total value of the lease including state paid tenant improvements. For lease terms in excess of 5 years, 1.25% commission is charged for years 6 and beyond. In addition, change orders, and incentives will have commission calculated at 2.5%. Incentives include discretionary tenant improvement allowances and value of negotiated free rent.|
|Over 10,000 square feet for more than 5 years||Commission at 2.5% for years 1-5 of the total value of the lease including state paid tenant improvements. For lease terms in excess of 5 years, 1.25% commission is charged for years 6 and beyond. In addition, change orders, and incentives will have commission calculated at 2.5%. Incentives include discretionary tenant improvement allowances and value of negotiated free rent.|
Commission on leases over five years are charged at 2.5% for years 1-5; and 1.25% for years 6 and beyond of the total value of the lease.
Initial payments will be based on the lease rate identified in the letter of intent. The final payment will be based on the Total Value of the Final Lease Agreement. The "Total Value of the Final Lease Agreement" includes the calculation of the final rental rate, the value of change orders, the value of lessor-offered incentives or allowances and additional tenant improvements paid by the tenant. DES will reconcile and adjust fees, as necessary at the time of the final lease agreement to update DES's compensations. Change orders, and additional tenant improvements, signed by both parties, are in lieu of an amendment to a Lease Agreement.
New Lease Services include, but are not limited to:
- Site/facility search, evaluation of potential sites, preparation of letters of interest/intent and lease terms and conditions negotiation.
- Preparation of lease documents and related correspondence.
- Planning and design assistance, including schedules, development and review of exhibits, plans, and performance specifications and addenda, and oversight of new space build out.
- Review, negotiate and approve construction costs. Construction management, including site inspections, ensuring compliance with lease terms and conditions, communications with Lessor, agency, contractors, and close-out of project.
Lease Renewal Services
For lease renewals, the Facilities and Services Allocation that agencies pay quarterly fund related leasing and design services. This allocation is based on a formula related to an agency's inventory of existing active leases, total square footage and lease value at biennial budget preparation.
Lease Renewal Base Services include, but are not limited to:
- Facility inspection, creation and verification of deferred items list.
- Lease renewal negotiations and document preparation, including related correspondence.
- Monitoring lessor's compliance for completion of the deferred items list.
The hourly rate for reimbursable services will be updated to $189 from $117, effective July 1, 2023. Rates have not been adjusted since 2010. The updated rate will apply to new contracts only. The old rate will continue to apply for contracts signed prior to July 1, 2023.
Reimbursable Services include, but are not limited to:
- Alterations to existing leased space requested at renewal and during the lease term.
- Request for assistance during the lease term (e.g., technical assistance, conflict resolution, lease modification, property management, and implementation of the withholding of rent clause).
- Electric Vehicle Supply and Equipment (EVSE) projects.
- Acquisition and disposal of property; lease development projects; easements, appraisals, rights-of way, etc.
- New space hourly projects.
Delegation of authority to negotiate and execute agreements to lease and/or rent offices, classrooms, and other spaces are charged a one-time fee of $250 for maintaining, overseeing, and updating the central registry's database.
Delegations of authority to negotiate and execute agreements to purchase, dispose, transfer etc. and real property are charged a one-time fee of $250 for maintaining, overseeing, and updating the central registry's database.
It is important that all parties involved in any project undertaken by DES have a clear understanding of roles and responsibilities and of the processes involved as well as clear expectations of the results. To meet these goals, DES implemented a process whereby an Interagency Agreement (IAA) is prepared and executed for each project.
An Interagency Agreement ensures that:
- RES services are provided in a consistent, predictable, and transparent manner.
- The Client Agency has a clear understanding of RES roles and responsibilities as well as its own.
- There are clear expectations as to what services are to be provided, how they will be provided and by when.
- There will be a clear understanding about the fees for RES services and when payment is due.
Please note that work on a project cannot commence until RES is in receipt of the IAA related to that project, signed by the individual authorized to sign such documents by the agency requesting the service.
Real Estate Services Division