How to budget for your next office renovation | Unisan Group
How to budget for your next office renovation

How to budget for your next office renovation

If you’re just beginning to consider the possibility of moving your company to larger quarters or renovating your present office space, here’s betting one of the questions at the top of your list is how much is this going to cost me? The honest answer is, It depends on a number of variables. Your costs, and ultimately your budget, are based a great deal on where in the country your company is located, what type of rebuild or remodeling you are expecting or need and is the space a new build, or a newer formerly occupied building?

We’ve put together some thoughts that will help you refine your goals, better understand rehab and new-build construction costs and better define the important questions you should ask of your architect, design team or construction specialist.

Two Office Renovation Tips That Will Save You Time, Frustration and Money

Tip number one. Before you do anything, consider hiring an engineer, architect or general contractor to oversee your office design. The skills, experiences and connections these professionals provide are well worth their fee. Their job is to obtain permits and review building codes, hire subcontractors, schedule and supervise workers, see that materials and equipment are on site, work with vendors to fine tune their cost estimates and so much more. The fee for these specialists is about 20% of your budget. While that estimate may make you pause, consider the fact that you won’t be taking time away from your business, while adding a second full-time job as a contractor.

Tip number two. Don’t sign a lease, have a discussion with your landlord about renovating your present office or sign a contract to buy a building, before you go online to your city or county’s building records. You want to review the Certificate of Occupancy (CO) for the building you are considering and search for any existing building violations. The CO will describe the conditions under which your building can be used. You’ll want to know if restrictions have been placed on the property you’re considering or if there have been complaints about the building and if the complaints or issues were resolved. Many an entrepreneur has signed a lease or purchased a commercial structure with the intent to open a restaurant or medical lab, only to find out later that the building where they intended to set up shop is not approved for their type of business. Trying to change such codes after the fact, can be time consuming and an expensive endeavor.

If your building hasn’t changed hands or had a new tenant for a while, it’s likely there are some building code violations. Perhaps work was done to the air conditioning/heating unit or electrical wiring without the proper permits. This means when you or your contractor file for the correct documents, all work will be scrutinized and violations will have to be corrected or a stop-work order may be issued. Your contractor or architect will be sure your contract holds the landlord responsible for correcting the violations.

Why Location Influences Your Costs

If you have ever compared residential real estate in different parts of the country, you’re aware that a two-bedroom home in California or New York can possibly cost quite a bit more than a similar structure in Wyoming or Tennessee. The same cost differences apply to commercial renovations and new building constructions. Real estate is far more expensive in a city like New York, where there are more people per block than in some mid western towns. The cost of labor, which will be about 10 % of your budget, differs as well. Labor In Philadelphia is 40% higher than in Cleveland or Charlston. In addition, if your area requires you to use union workers, your labor costs can be as high as $100 per square foot compared to non union labor at around $40 per square foot. Material costs can also vary depending on whether:

  • The products are locally sourced or imported
  • The time of year your construction or renovation is taking place, which determines shipping and fuel costs
  • Whether your building is located in an urban area or the suburbs.

More Thoughts on Costs

We have defined four different types of build-outs and the estimated costs of each to help you size up your budget. A build-out is a term used to describe a finished space ready for a new tenant. If the space is a turnkey build-out, the landlord has selected all finishes and materials and the office is move-in ready. A tenant improvement build-out allows the tenant to make changes or improvements to the space, with renovations and costs negotiated with the landlord and included in the lease agreement.

The national average cost of a turnkey build-out, in a new building with standard finishes, averages $40 to $45 a square foot. A moderately, above standard build-out, which means the landlord may reuse door frames and hardware, but include fabric wall covering and glass in the reception area, will cost approximately $54 to $57 a square foot. What is classified as a high, but not extreme, build-out, might include new-wood veneer doors, upgraded carpet and maybe a stone and veneer reception desk, would cost about $70 a square foot . The fourth office type might be referred to as a lavish finished build-out and would include more customized features and cost anywhere from $100 to $150 per square foot.

When deciding on your budget, ask yourself the following questions:

  • What type of office finish will make you happy, yet let you stay as close to your budget as possible?
  • How can you create a work environment that helps to make your employees’ work-lives more pleasant and healthful?
  • What type of experience do you want your customers’ to have when they walk through your door?

Then talk with your design team, architect or general contractor about how your budget can reflect your responses.

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