Choyce Tips: June 2010: Right-Sizing

(For access to full html version, please click here.) Opinions vary widely regarding “needed” space.  President Obama has 816 square feet in the Oval Office, plus a study down the hall.  Prisoners in Alcatraz were confined to 45 square feet, and that included a bed, table, sink and toilet.  Space density for office tenants averages between three-to-four employees per 1,000 rentable square feet.  Executive areas are less densely populated, and contact centers more so. 

Too often, we observe tenants who believe they got a “great deal” only to find out it was a sub-optimal office layout as their business evolved. While a rental rate may reflect a superb market value, wasted space is wasted money. An extra 1,000 square feet at the “aggressive rental rate” of $40 per square foot translates to losing $40,000 per year.  

We always encourage our clients to evaluate the space first and rent second.  Even when you initially chose a space that’s just right, changes in your company size, budget and corporate culture may eventually make it obsolete.

In today’s economic climate, landlords are eager to please current tenants by restructuring or reorganizing their space to ensure their renewal. Otherwise, they may be required to restructure for a new tenant anyway, at a far greater cost.

Change your Space

Rarely has a tenant lived in an office space for five-to-ten years without discovering things they would do differently.  Reflect on the past, plan for the future and create a “wish list” to best accommodate your changing size and the ideal working environment you want to create.

If your company is growing, you can  often adopt an open floor plan or relocate your conference room to avoid moving to a larger space. Conversely, if you have too much space, you may be able to right-size from 10,000 square feet to 8,000, then convince your landlord to rent the excess to someone else. At $30 per square foot, that’s $60,000 in savings per year! 

Improve Efficiency

Neat building angles, curved glass, dead-end hallways, column spacing, core-to-window depth and window mullion dimensions all impact the efficiency of your floor plan.  Assess your space layout to evaluate your size as a function of need. An inefficient floor design can add as much as five percent to your space costs.

Use an architect to analyze your office layout. Your landlord will build new points of entry, change wiring and plumbing, and even build walls as long as the cost of restructuring remains less than the value added. Only load-bearing walls are off limits.

Whether your company is growing or shrinking, today’s market lets you take control of your office space and demand modifications. In doing so, you can become more efficient and save thousands in rent payments.