Jerry Wit
Companies seeking new office or flex/office space typically invest a great deal of time and money visiting potential sites, comparing the price per square foot of competing buildings and analyzing tenant build-out and moving expenditures. But many do not devote equal care and effort to designing the most cost-efficient space plan, which could save thousands of dollars annually in rental costs.
A quick review of the math brings this into clearer focus. ABC Technology Company wishes to lease 10,000 square feet of space at One Main Street at a cost of $25.00 per square foot. The amount invested annually in this lease represents $250,000. However, creative space planning serves to reduce the size of the conference rooms, eliminates awkward corridors and downsizes the break room so only 8,000 square feet is now needed by ABC. The cost of the annual lease shrinks to $200,000 per year and, over the course of a 5-year lease, $250,000 is saved.
Small ways to save big
How can your company accomplish what ABC did? For starters, start the office search and space planning process early. Depending on the size and complexity of the tenant build-out that is needed, budget approximately 10 weeks for the construction phase and another 8 weeks to design and settle upon the right space plan. To take your time and do it right, a company should begin touring potential office locations 5 to 6 months in advance of the move-in date.
When initially meeting with the space planner, take the time to explain how your business operates and how workers “flow through” the office. In an ideal situation, the planner should perform a walk-through of your existing space to better understand the dynamics. Several basic premises can be applied to start cutting down on space to save money.
Does the company have multiple salespeople who are required to be making outside sales calls? If so, provide them with spaces near the front entrance so they will be reminded to be “out on the streets and knocking on doors.” What is the average number of people that will be using the conference room? Don’t make this common space any larger than it absolutely needs to be.
Can most of the office dimensions be approximately the same size (with some obvious exceptions)? Not only will this reduce the amount of space that is needed, but consistent office sizes will produce a “cleaner and more symmetrical” design that eliminates “jutting” offices and wastes little core space.
Is that extra bathroom really needed? Can the kitchen and break room be slightly smaller? A few square feet of space saved here and there adds up at the end.
Time always translates into money, so ask competing developers how long it will take to create the initial space plan. The savvy, experienced and on-staff space planning professional can present a design in as little as two working days. Companies with in-house services also know their buildings intimately inside and out and have an advantage over “outside” interior design firms in finding ways to reduce space.
What is the bottom line for determining the bottom line? Place as much emphasis on the space planning process — and ways to create the most cost-efficient office design — as you do on the square foot price of the office lease. By making a cost comparison with your eyes open, it may make economic sense to sign a lease at a higher rental rate, while saving many thousands of dollars over the course of the lease.
Water heaters in the ceilings and other ideas
Some creative developers value-engineer their office buildings in ways that is designed to reduce the amount of office space needed by the tenant. This includes the placement of water heaters in the ceiling of bathrooms, rather than taking up valuable and costly floor space. Heating, ventilating and air conditioning units that are placed on the rooftops of buildings also prevent tenants from paying for wasted space.
A savvy space planner can also design a build-out with an emphasis on the sharing of common walls, which translates to lower construction costs. Or, walls can be used sparingly in the plan, to be replaced by office cubicles.
Paint that transforms walls into marker boards, and more
The use of certain innovative products can also contribute to cost savings. Wall coverings and paints now exist that allow the wall surface to be utilized as a marker board or project screen. Tenants can say good-bye to electric projection screens, blocking that holds these screens and the purchase and installation of marker boards.
Gently used or refurbished office furniture and systems can save thousands of out-of-pocket dollars and should be considered in any design. This decision is also good to the environment. “Faux” finishes that give the appearance of granite countertops and vinyl flooring that “appear” to be ceramic, stone or hardwood are other cost-saving options.
The use of continuous ceiling grids throughout the space — rather than the use of separate ceilings that are centered within each room — can save significant money to the tenant because this process is less labor-intensive. Should expansion be needed down the road, additional cost savings would be realized due to the lack of renovation work required.
Office space planning is often compared to solving a complicated jigsaw puzzle. Pieces are scattered everywhere and they all need to be fit together to complete the finished picture. When looking for new office space, be sure to pay special attention to the expertise and creativity of the space planning professional, whether they are maintained on-staff or hired as an outside vendor.
Investing a little extra time upfront, including asking the right questions, can pay significant dividends in your annual rental expenditures.
— Jerry Wit is senior vice president, Marketing for St. John Properties, Inc., a Baltimore-based commercial real estate development firm that owns and manages more than 14 million square feet of space in five states. Visit www.sjpi.com for more information.