You’re reviewing the lease agreement for one of your older branches and notice that the lease is expiring in 18 months. The leadership team has been floating the idea of a branch transformation, and this branch seems like a good one to start on. How can you move this project forward?
In this situation, you generally have three options: renew the lease, close the branch, or relocate the branch. Changes in market demographics, shifting retail hubs, or reduced branch space requirements make relocating one of the most common decisions financial institutions make.
The work it takes to plan a branch relocation around a lease expiration date can be significant. How long will the relocation take, and what are your options if it takes too long? But with the right information and prep work, you can take on this project with confidence. In this article we’ll show you a few areas, including understanding your lease details, promoting internal alignment, and planning a delivery schedule, where up-front effort can make the branch relocation process relatively painless.
Review Your Lease
What are the exact terms of your lease? In addition to the expiration date, it’s also important to know your options for renewing or extending your lease. If a delay happens and you determine that your relocation date falls after the lease expiration, would you be able to obtain a short-term extension? What are the notification requirements, and how late can you decide to renew or extend your lease?
Having this information top-of-mind can help you weigh the risks of schedule overages.
Build Your Team
Who has a stake in this project, and who are the decision makers? Many people will have opinions or input on the project, and identifying them and integrating them into the team as early as possibly will help you better understand where everybody stands and open up a clear path to building a consensus.
Getting stakeholders on board early and establishing a high level of communication will help expedite much of the early planning work, from setting an investment budget to defining the project scope and requirements.
A common issue that teams can get hung up on is whether to do a complete transformation, with a new location and a different layout and staffing model, or to perform a relatively inexpensive brand wrap on the existing branch and keep things the same. Knowing where everyone stands early on can help focus your efforts on aligning individual team members and smoothing out potential speed bumps that might otherwise surface well into the project.
Research the Real Estate Market
Finding real estate is a process that appears easy, but in reality can draw out for months and cut into your project schedule. When this happens, it’s invariably the strategy and planning work that gets squeezed, a situation that can result in a branch that struggles to support staff or deliver fantastic customer experiences.
Having an experienced real estate broker with a focus in retail properties on your team can help you better understand what properties are available, how competitive the current market is, and how long it will take to find your next location. The broker can also help get you out in front of planned commercial development or properties that aren’t being publicly marketed, putting you ahead of the competition.
Understand a Typical Schedule
… and whether or not your project is typical. In the graphic below, we’ve broken a typical branch project delivery schedule into five stages with their average durations.
Understanding how a project is broken down, as well as the how your individual circumstances and project requirements can shorten or lengthen these phases, is important for planning around your lease expiration deadline. You aren’t building a detailed schedule here, but having a rough understanding of the timeline can help you understand how urgent the process is and whether you need to extend your lease or make other plans.
We’ve already discussed a few areas where the schedule can grow. If your team isn’t aligned from the beginning, the planning process can drag on. If you’re in a hot real-estate market, finding a lease could take months longer than expected. If it’s August and you’re building a new building, a cold snap in January could delay pouring the concrete foundation.
This is another area where early integration can pay off – your design-build partner can help you build a delivery schedule during the earliest conceptual planning phase and take some of the guesswork out of your timeline.
Get Started!
With these steps completed, you’re ready to kick off the project with the confidence that the process will contain much fewer surprises. Branch projects can be fun and engaging for both the leadership team and the organization as a whole, given the proper front-end research, planning, and communication work that takes the stress out of the process.
To learn more about the branch transformation process, check out our Branch Transformation Planning Kit! It’s an interactive guide that walks you through the process of planning a branch project, from the initial stakeholder alignment and project definition to writing an RFP and making a value-based partner selection.