In general we are seeing our clients businesses doing well and in many cases expanding their operations. With growth often comes the need to accommodate more people. With that comes the prospect of having to lease more space. We would strongly recommend that before leasing more space you check to see if a furniture solution to intensify your existing space may work. In the long run it could save you money compared to leasing more space.
Today a typical target rentable square foot per employee is approximately 180 square feet. This would be for primarily open concept space. That means for every approximate 10,000 square feet of expansion you could accommodate approximately 55 people. If average gross rental rates range from $35 per square foot (suburban office space) to $65 per square foot (Financial Core Office space) and construction costs average $75,including soft costs per square foot then over a five year lease term your total per square foot costs would range from $250 to $400 per square foot. This means the total five year cost on 10,000 rentable square feet of expansion space could range from $2,500,000 to $4,000,000 or approx. $45,000 to $72,000 per person and this does not include furniture or equipment.
New office furniture for primarily open concept space including workstations, chairs, meeting room and kitchen furniture ranges from $3,000 to $5,000 per person. You can see that if there is an opportunity to densify a portion of your existing space without compromising operational efficiency then there could be significant savings in pursuing a furniture solution as compare to leasing more office space.
If you would like to learn more about this approach please contact us.
Contributed by Scott Mulligan
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