Tenant Broker Training

1. Tenant Broker Training June 5-6, 2014

2. Agenda • Introductions • REDM Division Director • Leasing Background • Strategic Planning • Hiring a Broker • Approval Process • Lease Procurement • Lease Modification • Special Procurement • Lease Prior Approval • Lease Final Approval • Space Planning • Paid Parking Program • Reporting • Questions Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

3. Section 1 REDM Division Director Tom Berger Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

4. REDM Overview Division of Real Estate Development and Management (REDM) provides oversight and consulting services to 20 governmental agencies: • 13,000 structures • 64,000,000 square feet owned • $380,000,000 operating budget • $125,000,000 construction budget • 6.7 million square feet leased • $225,000,000 lease annual rent Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

5. Where we are! Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

6. REDM Overview • Leasing/Occupancy Management ($225 Million) • Leasing, Parking, Space Planning, CAD Design • Facility Management ($380 Million) • Operations, Maintenance, Energy Conservation, Capital Planning, Safety, ADA Compliance, Regulatory Compliance, Indoor Air Quality • Construction Project Management ($125 Million) • New Construction, Capital Projects, Tenant Build Out • Strategic Planning • 5 Year Planning Horizon – Build/Buy/Lease Projections Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

7. Portfolio Diversity The Usual Suspects • Office Space • Parking Structures • Warehouse/storage Non-Traditional • Fire Towers • Horse Barns • Possum Pens Historic Structures • Historic Capitol • Governor’s Mansion • Museums Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions • Specialty Use Space • Crime Laboratories • Evidence Rooms • State Vault • Food Service • Aircraft Hangers • Medical Care Facilities • Prisons • State Fire College • Residential Confinement • State Parks • Fleet Maintenance Facilities

8. Section # 2 Leasing Background Beth Sparkman Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

9. Who are the agencies? • There are 26 State Agencies, as well as numerous Boards and Commissions. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

10. Regional Map Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

11. DMS Website Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions • Leasing Forms • Forms • Parking Services • Paid Parking • Leasing Liaisons • List of Agency Liaisons • Adversely Affected Landlords • Tenant Broker Contracts • Leasing Workshops • Workshop Materials

12. What does it mean? Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

13. FACT DMS-owned database that tracks: • Private leases • Public leases • Government leases • Paid parking • Work order system • Fixed Capital Outlay • Construction projects • Preventive maintenance Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

14. SOLARIS • Florida Department of Environmental Protection (DEP)-managed database. • Tracks data related to land, facilities, and leases. • Receives nightly uploads from the FACT server. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

15. SOLARIS (cont.) • Land Inventory: • A populated and reconciled current state land inventory that enables DSL to produce reports and maps on all state lands that are owned, leased, or otherwise occupied. • Facilities Inventory: • A populated current facility inventory on all state facilities that are owned, rented, leased, or otherwise occupied or maintained. • Public Land Inventory: • A populated current public land inventory that can be used to reconcile the land inventory. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

16. SOLARIS (cont.) • Data Warehouse: • Agencies need to have a complete inventory of what the state owns, leases, or rents to improve efficiency in occupancy and use and to avoid building or buying in areas where there may be space or land available.    • Access / Data Extraction: • Each agency should be able to log into the FL-SOLARIS system and extract land / facility information. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

17. Chapter 255 Florida Statutes Governs Leasing • 119.071 Public Records Floor Plans • 120.57 Agency Decisions • 255.042 Shelter in Public Buildings • 255.043 Art in Public Buildings • 255.248 Leasing Definitions • 255.249 DMS Responsibilities • 255.25 Prior Approval • 255.254 Energy Life Cycle Costs Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

18. Chapter 60H, Florida Administrative Code • In 1838 the Department of State was created as keeper of the laws of Florida. • Florida Administrative Code is the official compilation of rules for the State of Florida. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

19. Florida Administrative Code Per Chapter 120, Florida Statutes … a rule …. is an agency’s statement of general applicability that implements, interprets or prescribes….the procedure of the statute. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

20. Section 3 Strategic Planning Arlisha Roberts Inman Hartsfield Sue Early Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

21. Strategic Planning Annual Data Gathering: • Spearheads the annual data gathering process related to state-owned and leased facilities for state agencies, Florida colleges, state universities and water management districts • Interfaces with assigned Tenant Broker to collect private market and trend data required for annual reporting Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

22. 2014 Annual Data Gathering Expectations Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

23. Strategic Planning Reporting and Production: • Prepares and publishes statutorily required annual reports (due October 1): • Master Leasing Report and Five-Year Strategic Leasing Plan • State Facilities Inventory and Disposition Report • Assists with lease cost savings and monthly operational reporting • Produces mapping products of all state-owned and leased facilities Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

24. Strategic Planning FL-SOLARIS/FITS Oversight: • Participates in the oversight and operation of FL-SOLARIS/FITS, an inventory of all state-owned and leased facilities • Provides oversight of contracts for enhancements to FL-SOLARIS/FITS • Keeps FL-SOLARIS/FITS up to date with respect to DMS facilities Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

25. Strategic Planning Backfill/Redevelopment Strategies: • Develops recommendations and coordinates implementation of strategies for backfilling vacant space within Florida Facilities Pool (FFP) facilities. • Provides buy/build/lease analysis to evaluate opportunities and make recommendations for cost savings and/or increased efficiencies. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

26. 2013 Backfill Strategies • The 2013 Five-Year Strategic Leasing Plan identified several FFP buildings with higher vacancies to “backfill.” • DMS received $4,155,693 to reconfigure and backfill space to meet agency needs: • Hurston – DOR, DEA, DFS + ADA work in restroom • Peterson – DCF + ADA work in restrooms • D’Alessandro – DEA + ADA work in restrooms • Trammell – DOH, DOC, PSC + ADA work in restrooms • The revised reconfiguration/backfill plan is projected to generate $558,017 in recurring (annualized) savings and $867,435 in annual revenue to the FFP. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

27. Snapshot of 2013 Reconfiguration/Backfill Plan Source: Excerpt from September 15, 2013, Legislative Budget Commission Revised Backfill Plan. Numbers are subject to change and have not been updated. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

28. Section 4 Hiring a Broker Beth Sparkman Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

29. Hiring a Tenant Broker Required by Paragraph 255.25.(3)(a) Florida Statutes • All actions on leases of 2,000+ SF require the use of a Tenant Broker. • Agencies choose a Tenant Broker and indicate their choice on the RSN. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

30. Hiring a Tenant Broker • Upon DMS approval of the RSN agencies are required to issue a purchase order to the Tenant Broker. PO shall contain: • Engagement Check List OR • Detailed Scope of Work • Engagement Check List or Scope of Work will indicate what documents the agency wants the Tenant Broker to complete and due dates for each step in the process. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

31. Hiring a Tenant Broker • Tenant Broker will ensure that the Lessor and Agency execute the Commission Agreement. • Commission rates may be negotiated, but cannot exceed the rates established in the contract. • DMS Commission Agreement should not be altered. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

32. Hiring a Tenant Broker Commission payment schedules: (These cannot be modified) New Leases • 50% on date the lease is signed. • 50% at time of move-in. Lease Modifications • 100% at lease signature date Stay in Place Leases • 100% at lease signature date Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

33. Paying the Commission • Lessor sends the commission payment(s) to the agency. • Agency deposits the check, and amends the purchase order to the correct commission amount. • Tenant Broker invoices the agency. • Agency requests spending authority from the Office of Planning and Budgeting. • Agency pays the Tenant Broker. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

34. Failure to Pay the Commission • Tenant Broker works with the agency to enforce the commission payment. • If requested DMS can intervene. • Agency can withhold rent and use funds to pay the commission. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

35. Credit Hours • DMS earns credit hours for every transaction managed by the Tenant Broker. • Credit hours are used as a payment for services rendered under the contract. • Agencies may request from DMS the use of these credit hours. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

36. Credit Hours Credit hours can be used for: • commission payments, • portfolio strategy services, • real estate consultation. To use credit hours agencies should provide a statement of work and request the Tenant Broker to provide a quote. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

37. Credit Hours • Agencies complete the credit hour request form and submit it to DMS for approval. • The most common use of credit hours is to offset the commission for lessors that cannot or will not pay. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

38. SECTION #5 Starting the Approval Process Becky George Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

39. Request for Space Need (RSN) • No agency may proceed with procurement, negotiation or execution of a lease action unless an RSN has been approved by DMS (Rule 60H-1.002, F.A.C.) • Agencies submit an RSN online requesting their desired lease action. • We can work with an agency to grant Conditional Approval so they can explore options and find out what is in the best interest of the state. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

40. RSN (cont.) • Once an agency has determined their direction they may request a revised RSN via email. • Agencies cannot conduct negotiations of any kind without an approved RSN. • Tenant brokers should NEVER perform any work without an approved RSN. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

41. RSN Details • Agencies submit RSN. • Agencies submit SAW (for new procurements and request to modify space) • If increasing FTE, agency must provide documentation indicating where the FTE’s are coming from, or provide proviso language when adding new FTE’s. • Agencies submit acknowledgement that there is no suitable vacant State or Agency-Owned Space. • Agencies and Broker check Adversely Affected Lessor/Excess Space (located at www.dms.myflorida.com) • If Adversely Affected space is available, the agency must justify why space will not work. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

42. RSN Details • Ensure that the RSN request matches the agency’s Annual Data Gathering Plan. • If agencies are unsure of their need, they should submit an RSN indicating what they think they would like to do with permission to engage the Tenant Broker. We will then grant Conditional RSN Approval. • When the final need is determined, the agency can revise their RSN request via email. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

43. Space Allocation Worksheet • Required at the RSN stage. • Documents the agency’s space needs and total FTE count. • Page 1, per Rule 60H-2.002, F.A.C., is required to be at or below 180/SF per FTE. • DMS compares prior SAW to currently submitted SAWs for consistency. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

44. Agency Review Checklists • DMS has prepared Agency Review Checklists to better assist our customers. • They are available on our website under Pre-Approved Lease Forms. • There is a tab for each applicable lease type, which specifies the requirement for each phase. • We encourage everyone to use them, including Tenant Brokers. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

45. Agency Review Checklists Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

46. SECTION #6 Procurement Beth Sparkman Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

47. Types of Procurements QSP – Quote Submittal Package ITB– Invitation To Bid RFP – Request For Proposals ITN – Invitation To Negotiate Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

48. New Leases Less Than 5,000 Square Feet Process Steps: • Submit a Request for Space Need (RSN). • Issue a Purchase Order with Scope of Work. • Tenant Broker hired by the agency. • Prior Approval from DMS. • Final Approval from DMS. Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

49. Advertising • Leases for 5,000 square feet or more must be advertised (paragraph 255.25(3)(a), Florida Statutes) • Most agencies advertise on the Florida Vendor Bid System. -Vendor Bid System Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions

50. QSP – Quote Submittal Package Is a quoting process used for leases less than 5,000 square feet and must contain: • Physical address, • Landlord name/address, • Net rentable square feet, • Rate per year, • Term in years, • Tenant improvements offered, • Energy Star compliance Introductions REDM Division Director Leasing Background Strategic Planning Hiring a Broker Approval Process Lease Procurement Lease Modification Special Procurement Lease Prior Approval Lease Final Approval Space Planning Paid Parking Program Reporting Questions