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Do you have a commercial lease expiry happening in the next three years? Are you preparing for a possible renovation, build-out or move? A commercial office renovation can consume a significant amount of time and exceed the budget or schedule if not well planned. The success of an office renovation or move depends on a few critical factors, such as spending enough time to prepare, applying for permits, scheduling and budgeting. Consider prioritizing these four components when starting a new commercial office renovation:
1. Plan ahead
The earlier you start planning an office renovation, the easier the entire process will be. Companies should start planning 12-18 months (approximately one and a half years) before their lease expires; for larger companies, this can take up to 2-3 years. However, you can never start too early. If you know you need to do something, it is always better to get a head start so that you are not tight on time at the end and forced to make rushed decisions.
Most clients I have worked with start the office renovation conversation 24 months before their lease expiry. There are many factors to consider when deciding where to begin. Your lease expiry date, the size of your space, company growth and location are all factors that you should consider when planning your workplace strategy. An ideal project trajectory involves starting the conversation with real estate brokers, workplace designers and builders 24 months prior to your lease expiry. Furthermore, it is critical to note that the later you start, the fewer options you will have.
If you decide not to move or undertake a substantial revamp and believe you can do an office remodel within a period of a couple of months, think again. Anything requiring a permit takes at least eight months. The shortest period I recommend for an office build-out is eight months, but this does not allow any contingency for in-depth design documentation, permit or onsite delays. A rough critical-path timeline for a standard build-out of 5000ft-10,000ft looks like:
2. Clear expectations and communication
The best way to ensure the success of a project is by setting clear expectations of the cost and schedule from the start. Once expectations are defined, communication between project participants should be upheld throughout the project. Setting a communication plan from the start is an effective technique to ensure consistent communication throughout the project. A communication plan can include several elements such as meeting rhythms, weekly reports, email updates and an online project portal. Maintaining a regular communication rhythm reduces the likelihood of unpleasant surprises. Nobody enjoys unforeseen problems; therefore, we must do everything to lessen risks.
Different individuals prefer to communicate in diverse ways. There are several ways to uphold communication, from continual daily communication to signing a contract, setting a deadline and expecting everything to be completed by then. With all these varying levels of contact, it is critical to have a communication plan in place from the outset. Ultimately, creating clear expectations and keeping open lines of communication sets you up for success.
3. Look globally for innovative inspiration
The war for talent has intensified in recent years, with competition becoming increasingly rigorous each year. Office design and space historically have been significant pieces in the puzzle for talent. Anyone competing in industries where office space is vital to attracting and keeping employees must strive to push design boundaries to improve the employee experience. Traditionally, office design in North America follows design trends in Europe and Asia. Finding out what other businesses globally are doing can help inspire you to create an office that differentiates you from the local competition in the war for talent.
4. Negotiate your tenant improvement allowance
If you have your business plan set up for the foreseeable future, negotiate for the longest lease you can. Negotiating a longer lease reduces the risk for a landlord, which means they will be more flexible with the terms, giving you a larger tenant improvement allowance, longer fixturing periods, lower rent, etc. Because tenant improvement allowances are paid for through rent, getting a larger tenant improvement allowance is more cost-effective than using capital from the business. Consider it an interest-free loan in which, instead of borrowing money from a bank to improve your commercial office, you borrow it from the property owner. Moreover, when tenants make significant changes to their building, the property owner becomes considerably more cooperative, as you are making improvements to their property. After you leave, property owners can swiftly re-lease the space if you have made quality modifications.
Undergoing an office renovation isn’t easy; many factors, from tenant improvement allowances to communicating on budget and schedule, come into play. However, planning, setting up clear expectations and communication, looking for global inspiration and negotiating your tenant improvement allowance are excellent steps toward getting the most out of your office renovation.