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Renovating Your Business's Location

Few locations are perfect from day one. To make the most of your location, learn about the different aspects of buildings and which professionals can help you renovate your location to your liking.
August 31, 2005
URL: http://www.entrepreneur.com/article/79576

Editor's note: This article was excerpted from The Great Big Book on Real Estate Investing. You can learn more about the book in our bookstore.

For people who don't work with buildings for a living, the physical interrelationships among the components of a building can be somewhat mysterious. But whether you're leasing or purchasing a location for your business, it's a good idea to understand these components. Once you have been through the nuts and bolts, then we'll discuss the people who can help you with demolishing, rearranging, and/or rebuilding these components.

Putting the Pieces Together

In general, I like to take people through the component parts of a building in the order in which it would be constructed so that it makes sense logically. When creating a building, the architect/designer has to go through the same steps, in the same order, to "build" it on paper. The only difference between doing it on paper and doing it on the ground is that the architect first designs it from an exterior perspective and a floor plan so that he or she knows how to construct it on paper, starting with the structural design and foundations, while the contractor starts with site preparation, utilities and then foundations.

Another component of the foundation is the on-grade slab. "On-grade" means that the slab is resting on prepared ground rather than suspended over a basement. The slab serves two purposes: it pulls the footings and structural components together and it serves as the underlying floor for the ground floor of the building.

Structure

Attached to the footings and other foundation elements is the building's structure. A structure can be of many different types. In housing, there are two basic types of structure: perimeter load-bearing walls and post and beam. Commercial structures, due to their size, are generally a combination of the two or, in the case of mid- and high-rise structures, a steel skeleton on which the rest of the building is hung.

Roof Design and Construction

Roofs may take many shapes, from flat to peaked and everything in between. They can be angular, rounded or almost any shape imaginable. The support component is generally trusses, but may be as exotic as cables. It all depends on the designer and the shape. The roof is composed of the underlying structure of trusses and wood or steel panels to support the roofing material. The roof itself is then constructed of traditional shingles or built-up roofing, composed of felts, tar and a wearing surface. Modern flat roofs are now also offered in sprayed-on foam with a watertight membrane over the foam. Shingles vary from the traditional asphalt to wood, concrete, clay and slate. Another alternate for peaked roofs is a metal roof, as simple as the old corrugated roofing to prefinished standing-seam metal roofs, constructed of interlocking panels that run vertically from the ridge to the eave, with the seam where two panels interlock raised to channel water away without seeping between panels.

Interiors

Interiors are generally divided by non-load-bearing walls. In post-and-beam structures, some of the walls are permanent and load bearing and the rest can be moved around. There are different types of walls in commercial structures, serving different purposes, such as tenant separation and interior design. All walls are constructed from two components: studs (uprights, either wood or steel) and sheetrock or other wallboards. Insulation within the wall is optional. The finish is then applied to the surface of the wallboard.

Mechanical Systems

A building's services are provided by its mechanical systems, composed of electricity, water, sewer, gas, telephone, cable TV, data distribution and HVAC. These systems are installed in a building before the walls are finished, so that these systems are concealed. In renovation projects, you will need to demolish the wall surface to modify or remove any of them.

Consultants and Contractors

It takes many people to put it all together, starting with the consultants who collect information and design and ending with the tradespeople who do the physical work. Each specialized professional has a specific function in any project. You will get to know them if you are going to remodel your building.

Consultants

The consultants who gather information and design the buildings are engineers, architects, planners and designers.

Contractors and Builders

Within each category, there are two types of contractors-general contractors and subcontractors. In general, commercial contractors are union. Whether residential or commercial, union or non-union, all contractors are required to be licensed.

Licensed vs. unlicensed, laws and liens.

The licensed contractor must post a bond to be placed into a recovery fund for the customers so that shoddy work or substandard materials can be replaced. There is a limit to what the recovery fund can pay on a single claim, so it is vital that you choose contractors, general and subcontractors alike, who are financially solvent, experienced and clearly qualified to do the work.

A licensed contractor with a signed contract can enforce payment for completed work through the lien process. If the contractor has not been paid in a timely fashion, he or she is allowed to record a mechanic's and materialman's lien on the property. This class of lien provides for people working on the property or supplying materials to the project. To perfect a lien, several things must happen.

First, the contractor must have a contract directly with the owner of the project or the contractor or supplier must send a pre-lien notice to the owner prior to starting the work stating that he or she is providing labor or materials to the project under a subcontract with the general contractor. Then, if the contractor or supplier is not paid on time, he or she may file the lien and, with the two notices, the lien is deemed "perfected." Just because the lien has been filed and perfected does not mean that payment is automatically owed or will be paid. The owner may dispute the lien in court and, if successful, the lien may be voided. This lien must be paid before the property can be sold with a clean title.

As you can see, the building and remodeling of a commercial location can be a complex venture. But with the right know-how and resources, you can make your business location exactly what you need it to be.

Stuart Leland Rider is a commercial real estate developer, commercial general contractor, lecturer and author. Over the past 30 years, he has successfully developed 785,000 square feet of commercial office space and 625,000 square feet of retail shopping center space, and currently has active projects totaling 350,000 square feet of retail space. He's the author of From Dirt to Dollars, an Entrepreneur's Guide to Commercial Real Estate Development, currently in use as a textbook for seminars in real estate development; The Complete Idiot's Guide to Investing in Real Estate; and The Complete Idiot's Guide to Investing in Fixer Uppers.