03 February 2016, by Paul Mautz
In 2013, 10 health regulatory authorities started a journey to collocate and create a model of one organisation providing the corporate services for all 10. The Nursing Council, with its experienced business team part of a staff of 40 regulating over 52,000 practising nurses, was chosen to provide the corporate services.
Part of its remit was to consolidate the existing premises of all health regulators into a single front and back office to achieve financial and operational benefits. The Nursing Council’s CEO Carolyn Reed faced an interesting property challenge. This is her story…
Our organisation was chosen to find premises that would allow us to offer shared services and provide capacity for 80 people on one site. So that’s double the number currently in the Nursing Council team.
The process was complicated by having to accommodate the requirements of other organisations. We were still in the very early stage of our relationship with them and we had to understand their often different interests and desires. That was the early stage project risk.
To minimise it, we needed to choose the most effective model to deliver the project. We thought a Partnership model would have been too messy and protracted and didn’t take into account the vastly different sizes of the participating organisations. Instead, we decided a ‘Provider/Customer’ relationship with the Nursing Council as Provider was the best route. It felt right. My moral compass told me that too. It would allow us to get into the building procurement process as quickly as possible.
The Group agreed and we set to work in earnest in September 2014. We were looking to achieve project completion in early 2016 – a tough objective, but a motivating one. There was – and still is – a weight of responsibility because I didn’t want to let the other organisations down. Equally, there is great opportunity in the future so I remain excited about what we deliver.
I decided to keep the project team small. We work with a Board and so do the other regulatory organisations – so keeping lines of communication tight was critical. So the team comprised of myself, our Corporate Services Manager Lindsay Hiener and an external Consultant – Paul Mautz of TwentyTwo.
I’d worked with Paul six years ago on a project to decide if we would buy a building, relocate to another leased property or refurbish our existing premises in Willis Street. We had a great experience then and an excellent outcome. Paul was clear about the process; we absolutely always knew where we were going, what we were doing and what we could expect. He was clear about the outcomes that he could deliver, what our contribution would be and he had always delivered on time. We liked the fact that he really pushed us to be clear about the reason behind our decisions and to consider alternatives and we found him incredibly respectful in the way he worked with people to build relationships. That’s always been really important to us in our regulatory work. Our reputation is important so we wanted to work with a partner who we knew would also have good business ethic. It was a natural choice to choose him again for this project.
In addition, I think TwentyTwo’s independence was also vital. As Provider on the project, we needed to be seen by all boards and our nursing stakeholders to be making the right decisions for the right reasons, rather than ‘our decisions’. Also, we didn’t want to work through a broker because I wasn’t confident a broker would have the level of expertise that I needed, nor be ‘alongside me’. I really needed a trusted adviser.
Paul helped us first in identifying the real needs of the organisations. He made us think very carefully about how much we could achieve… setting correct expectations early on. But he was also quite flexible once we’d established our needs, recognising that things are often a ‘moving feast’. This helped with the other organisations because they recognised they were being listened to. Our needs centred on earthquake performance, affordability/value, location/accessibility, a ‘professional shop front’ and natural light.
We went to market to identify premises’ availability, suitability and optioning. For each building, Paul would report on the pros and the cons. He kept an eye for the future, not just for the here and now needs. He challenged our expectations and broadened our horizons and opened us up to opportunities we might never have considered in respect of location and style of building.
Most importantly, he developed a really good risk and weighting framework so it was very easy to narrow down to the final three. And he was very good at looking at our final deadline of what we wanted to achieve given lease negotiation and fitout time.
From my perspective, it was important too to know that the minute I walked into a place I’d say to myself, ‘yes, this is good’ and ‘yes, we really could shift to here’, ‘this will be good for our business and I can see how we could make it work’. And we found that…
The Project Team made the decision to go for two-floor premises in Willeston Street – a building with the EQ performance we wanted, a professional frontage in a good location with 360-degree windows for natural light. It was the building that truly felt ‘most right’.
Paul led the lease negotiations and I had an intuitive idea of what good value would look like. The final deal felt right financially. We got a reduced rent, as well as rent-free for a year on a six-year deal. And Paul got the landlord to take on quite a lot of the fixing up of the building before we move in.
In addition to procuring the new premises, TwentyTwo is also helping negotiate exit from our existing premises.
The fitout of the new premises is now progressing. There’s still some way to go but I’m confident. We recently took the other nine tenants through to have a look where they’re going and we got a really positive response from them. And that was so good because you never really know what the reaction will be. I think that everyone feels that the solution has exceeded expectations – especially financially and in terms of location. We’re at the top of Willis Street and I had thought that, for the rent we negotiated, we would probably have to go further afield. I think we’re all very excited about moving in.
I always say that process is everything. If you get the process right, you’ll be happy with the outcome. We decided to invest in the process at the beginning by getting the right people – trusted advisers – working with us. That was TwentyTwo. I feel that they’re very wise, very experienced, very thorough, incredibly professional, they deliver on time, they deliver what they’ll say they’ll deliver – and in my experience more.
I always felt Paul had my back – and, as a CEO, there’s not many people you can say that for!
He was immensely helpful for me because he’s very calm and very clear. He was just incredibly helpful with the decision making. He gave us very good advice, even when that’s meant that they’ve had to push things out beyond what they thought. They’re not afraid to challenge us and I really value that. It feels like a respectful, professional relationship.
27 June 2016
If you’re responsible for your company’s accounts or managing its property portfolio, you should be aware of the upcoming changes to the treatment of lease rent liabilities in the financial statements.Read more...
04 June 2015
TwentyTwo's Associate Partner Paul Mautz MRICS FPINZ will be presenting the RICS Oceania three-hour training session covering Commercial Property Leasing.Read more...
04 June 2015
TwentyTwo’s Paul Mautz acted as lead adviser for the Crown’s lease of space in the recently announced $150+ million, river-front office and apartment complex in Christchurch CBD.Read more...