Outgrowing your office space is a great problem to have. Usually, the need for more space is driven by growing revenues. However, while it's a good thing, it also poses challenges since you have to figure out how to accommodate your new needs within an existing real estate lease or ownership structure that might not be flexible enough. Here are some strategies that can streamline the process.
Don't Expand -- You Still Have Room
Standards for office design have changed a great deal. If your office follows a traditional plan with 130 to 250 square foot private offices, large work rooms and file storage areas, you might be able to increase your density by 50 to 100 percent through reconfiguration. Open floor plans, assigning workspaces by need instead of rank, resizing offices and cubes for smaller modern technology and setting up hotellng and hot desking all allow you to squeeze more productivity out of your existing office space. Another option, if your culture allows it, is to allow people to work virtually, which opens up desks.
Talk to Your Landlord
If you have existing leases that you cannot easily and affordably break, it's time to talk to your landlord. The easiest solution is to expand into an adjacent vacant office space on your floor in your building or, if you are large enough to take up multiple floors, to take an adjacent floor on the same elevator bank. However, you can't do that if no such space is available.
Most landlords are always willing to talk to good tenants about leasing them more office space. They might even be willing to allow you to move to a different, larger, space in your building or in another building that they control. You might even be able to have them modify your lease to give you the same term across the new and old spaces if that works for your organization.
Spin Off or Relocate Unnecessary Divisions
When a contiguous expansion isn't easy, your strategy shifts to keeping your core together. To do this, identify your company's non-core divisions and either spin them off to outsourcing vendors or relocate them to other spaces. For instance, you could move a customer service department to a call center to free up office space for more hires. While this can be culturally damaging since those off-site divisions are further from your company's day to day operations, this compromise can minimize your costs of growing in inflexible situations.
Crunch the Numbers and Bite the Bullet
Finally, if you can't get creative and basically have a choice between moving or stopping your growth, it's time to sharpen up your spreadsheets. Quantifying the costs of moving to new office space is easy. Simply add up your new rent, capital costs, moving costs and any expenses to break your lease. But that's only half of the story.
To get the full picture, you also have to look at what you would give up by not moving. Going through this exercise could make paying to break your lease look cheap. Bear in mind, also, that if you were to do this, you'd be able to re-enter the market and, hopefully, negotiate a better deal than you currently have, especially since you'd be taking more space.
Other great Office Space articles to check out:
Subscribe for more great CRE tips!
