When an office no longer works for a business, relocation can seem like the obvious next step. Maybe the company has grown, the layout feels dated, employees need different types of workspaces, or the building simply isn’t making the impression it once did.
But moving comes with costs of its own. In many cases, commercial remodeling can solve the problems prompting a move without requiring a business to give up a location that otherwise works well. So, which makes more financial sense: renovating your current office or relocating?
The answer depends on more than the price of construction. Businesses should look at occupancy costs, downtime, moving expenses, lease terms, long-term space requirements, and the amount of work either property will require.
Start With the Reason You’re Considering a Move
Before comparing estimates, identify what is actually wrong with the current office. A business that has genuinely outgrown its building may have little choice but to relocate. The same may be true if parking is inadequate, the location no longer serves customers or employees well, or the building cannot support the company’s long-term plans.
Other problems are much easier to solve through commercial renovations. An inefficient floor plan, outdated finishes, poor lighting, inadequate meeting space, limited storage, or a lack of collaborative areas can often be addressed through a thoughtfully planned office build out. This is important because moving to another property may simply exchange one set of problems for another.
The Real Cost of Office Relocation
The financial comparison shouldn’t be limited to the cost of remodeling your current space versus the rent at another property. Relocation can involve:
- Moving furniture, equipment, inventory, and technology
- Deposits and other lease-related expenses
- New signage and branding
- IT and telecommunications setup
- Employee downtime
- Furniture or equipment that doesn’t work in the new space
- Changes to commuting, parking, or accessibility
- Improvements required before the new office can be occupied
That last expense can be substantial. A new lease doesn’t necessarily mean a move-in-ready office. Depending on the property and the needs of the business, a new location may still require a significant commercial build out. Walls may need to move, electrical and data infrastructure may need updating, conference rooms may need to be created, and finishes may need to be replaced. In that situation, the business isn’t choosing between moving and renovating. It’s choosing between renovating the existing office and moving plus renovating another one.
When Office Renovation Makes Financial Sense
Staying put can be especially attractive when the location itself is still valuable. If customers know where to find you, employees have manageable commutes, parking works, and the amount of square footage is sufficient, planning an office renovation may allow you to preserve those advantages while addressing the shortcomings of the space.
Some office renovation ideas can also improve how effectively existing square footage is used. Private offices that sit empty much of the day might become flexible work areas. Underused storage can be reconfigured. Departments can be reorganized to improve workflow. Conference and collaboration spaces can be resized around how the company actually operates today. A skilled commercial remodeling contractor can help determine whether the building can realistically accommodate those changes before the business commits to a larger move.
Renovation can also allow improvements to be phased. Depending on the project, a commercial construction remodeling company may be able to sequence work around business operations rather than requiring the entire office to shut down at once.
When Relocation May Be the Better Investment
Renovation has limits. If a company needs substantially more space, the current property has major structural or building-system limitations, or the location itself has become a disadvantage, investing heavily in the existing office may not make sense.
Relocation may also provide access to a building better suited to the company’s future needs. That could include better accessibility, more parking, newer mechanical systems, improved energy efficiency, or a floor plate that requires less modification.
Before signing a lease or purchasing a new commercial property, however, businesses should understand what they’re getting. A commercial building inspection can uncover issues that aren’t immediately apparent during a walkthrough. It’s also important to determine what modifications will be necessary and who is responsible for paying for them under the lease. Bringing an office build out contractor into the conversation before committing to the space can provide a much clearer picture of the actual investment required.
Don’t Overlook Permits and Code Requirements
Whether you’re staying or moving, construction may trigger permitting and code requirements. The scope of work will determine what commercial building permits are necessary. Changes involving electrical systems, plumbing, mechanical systems, walls, occupancy, accessibility, or other building components may require plans, approvals, and inspections.
For businesses unfamiliar with the process, commercial building permit help from an experienced contractor can make budgeting and scheduling more predictable. This is particularly important in Chicago and surrounding municipalities, where requirements can vary based on the project and jurisdiction. Working with Chicago commercial contractors familiar with local requirements can help identify these issues during planning rather than after construction has already been scheduled.
Compare the Next Five Years, Not Just the Next Five Months
One of the best ways to evaluate renovation versus relocation is to widen the financial window. Instead of asking, “Which option costs less this year?” consider what each option is likely to cost over the next five or even ten years. For the existing office, consider renovation costs, rent or ownership expenses, expected maintenance, utilities, and whether the space can accommodate projected growth.
For a new location, include rent increases, moving expenses, the cost of the commercial build out, new furniture or equipment, potential downtime, and any tenant improvement allowance provided by the landlord. The lowest upfront price isn’t necessarily the least expensive option over time.
Get Construction Numbers Before Making the Real Estate Decision
Businesses sometimes begin searching for new offices before determining what it would actually cost to improve the space they already have. It can be useful to reverse that order.
Before deciding that relocation is necessary, have commercial renovation specialists evaluate the existing office. At the same time, if you’re considering a new property, have a commercial general contractor in Chicago assess the proposed space and the likely cost of making it operational. A commercial build out firm can evaluate both scenarios from a construction standpoint, giving decision-makers more useful numbers than lease rates and square footage alone.
Renovate or Relocate? Make the Decision Based on the Business
There isn’t a universal winner. Renovation often makes sense when the location and amount of space still work but the office itself does not. Relocation becomes more compelling when the fundamental limitations of the property can’t reasonably be corrected. Either way, the strongest financial decision starts with understanding the full cost of both options.
At Moller Builders, our commercial build out services help Chicago-area businesses evaluate, plan, and execute office improvements with the larger business picture in mind. Whether you’re considering improvements to your existing workplace or evaluating the construction needs of a new location, we can help you understand what’s possible before you commit.
Considering an office renovation or a new commercial space? Contact The Moller Group to discuss your project and get a clearer picture of the construction involved.
