A Formula for Determining How Much Office Space You Need? Checklist+Needs=Confidence

Being effective as your company’s in-house Real Estate Czar isn’t only about matching up your needs to available properties. It requires going the extra mile and doing what it takes to ensure your needs are perfectly suited to the properties you have found, and resolving not to stop a foot short of that distance.

There is a lot at stake: Money, morale and money. Remember that occupancy costs are typically one of the top three expense items on a company’s P&L. A 5% savings in rent can result in a meaningfully improved EBITA.

The best way to do this is to develop a checklist of critical needs that you can follow. It will ensure you cover all bases without taking an inordinate amount of time on each business unit navel gazing. Creating a Facility Critical Needs Checklist is the best way to accomplish facility cost reductions. It will help you determine where to secure real estate that’ll best serve your needs, in addition to what types of properties are out of the question.

There are available refined a market survey checklist that covers all concerns and helps speed along the process of buying and leasing commercial real estate.  Send us an email and ask for the “Client Needs Analysis Checklist”. Let us know if it is for office or industrial space, and the approximate number of SF that you think that you need. The checklist will make your programming simple, reduce your facility costs and provide you confidence that the space you commit to will work for you for a long time.

Here’s a list of some critical questions to ask yourself that will help you create your own comprehensive market survey checklist.

Taking the abstract out of space – What are your needs with respect to building functionality? Work with your stakeholders to determine how much space (if any) they’ll need for reception areas, conference rooms, mail room, copy center, employee lounges and kitchenettes, private offices, and additional business units like HR and accounting.

Plan for 36 months from now – Get an idea of the company’s projected growth. Where will the company be with respect to numbers of employees in two, four, or six years? Will you be amenable to seeking a larger property at these times, or are you interested in finding a property you can grow into?

How to get buy-in for the space that you really want – What are your financial objectives with respect to the property you’re shopping for? Find out how your internal client wants to measure occupancy costs: by square footage, by comparison to current costs, or by comparison to market costs. In addition to this, you’ll have to work closely with your team to determine if the property they’re seeking falls under the category of A, B or C class. This may be something easily determined by the type of company they have, but in some cases it won’t be as cut and dry as that.

Parking complaints (X) 2 = Your short-term reality – Determine your parking requirements. This will greatly inform a stakeholder’s decision about where to secure real estate, especially in areas where parking is at a premium. You might be able to line up your client an A-class property near walking distance of numerous restaurants, but if you can’t secure for your internal clients the necessary parking for existing staff and visitors, that’s a deal killer.

Set expectations about drive-time changes early in the process- What are your location objectives? You may discover that some stakeholders are wide open to considering any location, as long as it can meet square footage requirements. On the other hand, you may have some clients who are so averse to relocating too far from convenient amenities that they’ll be willing to consider smaller facilities to accommodate a prime location.

When you are all done, try a simple heuristic to see if you are in the right ballpark:

Number of employees (times) 250 SF = Future Total Usable SF

For space less than 3,000 SF, you will need a higher SF constant. For space over 7,500 SF, you can lower the constant. Recently we did a deal with Accenture that was 123,000 SF. The use was for a call center with little paper – they averaged 136 SF per person. On the flip side of that is that our own office averages about 350 SF per person. We have only 6,500 SF, and there is a lot of paper and projects that need to be spread-out.

Let us know if you want to see the checklist we used.

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