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Why Does This Simple Office Remodel Cost So Much?Why Does This Simple Office Remodel Cost So Much?

 
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Posted: 06/12/12 05:37pm  Reply with quote
Why Does This Simple Office Remodel Cost So Much?

These days, many companies are choosing to make a few minor revisions to their office space instead of building new office buildings or undertaking a gut-and-rebuild or interior overhauls. Whether demising space to sublease a portion of it, or making changes that improve productivity or attract customers, businesses are focused on ways to increase revenue with minimal expense.

I recently met with a new client, the principal of a law firm, who wanted to make some interior changes to their office suite. After she explained her wish list, I provided a ballpark construction cost estimate. Although doing so can nip a potential project in the bud, I feel it is important so money is not spent on design and drawings only for the project to be cancelled when the construction bids come in too high. Why so much?, this attorney wondered, We just want to move a few walls. This is very a common question.

Moving walls is not as straightforward as most people think. Actually, walls are notmoved at all. Existing walls are demolished, and new walls, in different locations, are built from scratch. Moreover, changing wall locations requires relocating HVAC vents, light fixtures, sprinkler heads, electrical wiring and outlets, telephone and data cabling, and sometimes moldings or wainscoting. Where existing walls are demolished, entire new areas of flooring and ceiling material are usually needed, because simply bandaging the wounds left by demolished walls would be unsightly. This means re-carpeting an entire room or an entire office suite, so the carpet matches throughout.

Many construction trades are needed to relocate even one wall, so a General Contractor must be hired to coordinate the necessary sequence of events amongst the various trades. The GC will hire framing, drywall, HVAC, electrical, cabling, flooring, and demolition subcontractors, and charge about 20% above and beyond the total subcontractors fees. A minimum amount is charged to make it worth the effort, so small projects cost more per square foot than large projects.

Don't forget the permits! Wall moves require a building permit. The building department requires a licensed architect to submit construction drawings for their approval. A minimum amount of drawing work is required regardless of the project size, so design fees, like construction costs, are more per square foot for small projects.

And then there are the code upgrades. Most remodels occur in older buildings that are not up to code, and code upgrades are triggered by the permit process. Upgrading the toilet rooms, handicapped signage and parking, lighting, and the life-safety system are commonly required code upgrades. These upgrades alone could cost more than the original remodel scope. However, a hardship waiver is usually granted for small projects, which caps the cost of code upgrades to 20% of the original remodel scope. So a $50,000 project would cost $60,000 with the required code upgrades added.

The building department also requires asbestos testing to be performed and submitted if there is any significant amount of demolition work. If asbestos exists, abatement in the area of demolition will be required in order to proceed with the project.

Well, this all seems very unreasonable, you may be thinking. The truth is that the construction process can be a bit painful at times, and it's an architects job to make it as painless as possible for clients who are not familiar with it.

If a lease is coming up for renewal, it is common for a portion of remodel costs to be paid by the landlord. A property owner typically offers new tenants a tenant improvement allowance, anywhere from $5 to $45 per square foot, and will do so for a renewing tenant as well. It may make sense to postpone a project until a lease renewal can be negotiated.

Phasing a project is a way to keep the cost manageable. An architect can develop a master plan, which can be implemented in two or three phases over time. The total cost will be slightly higher due to the inefficiency of this approach, but the smaller chunks may be easier to swallow. Also, much of the price tag can be depreciated over a period of time.

Often, goals can be met in a different way than the client originally envisioned. There are potentially multiple solutions of varying effectiveness and prices. An architect with a fresh perspective may be able to offer out-of-the-box solutions of lesser scope. I always ask myself, What is the simplest way to solve this problem? There is often a solution, although it may only be an interim one, which does not require permitting.

There are many creative ways to get the most for your money. It's recommended to consult with an accountant, as well as an architect, to look at the costs and benefits of a potential remodel. A few hundred dollars spent in consulting fees upfront could save a lot.

Elisa Garcia, RA
Garcia Architects
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