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December 2017 — Office Properties Quarterly — Page 17
carpet was chosen to accent small-
er, more strategic areas of polished
concrete.
The tenant was confident enough
to scour showroom floors and
choose some discounted pieces
of sculpture and furniture, which
added to the eclectic style of the
office. Again, the focus here was on
recruitment and retention through
a blend of premium and midrange
products that inspired a creative
and highly mobile staff and man-
agement.
In another case, a building owner
in the same submarket estimated
a lobby renovation to cost approxi-
mately $77 per sf. The new space
would be a mixture of open and
enclosed areas, including new walls
and infrastructure improvements.
The original design called for the
entire ceiling to be opened up in
an expansive lounge/break area. A
custom rotating flat screen/white-
board would add $6 per sf to the
cost. Folding, movable glass doors
enclosing a conference room came
in at another $5.50 per sf. Although
the landlord did retain many of
these improvements, it eliminated
some of the higher-cost alterna-
tives.
Opening a ceiling, for example,
can run $32 per sf or more, includ-
ing new ductwork and suspended
light fixtures. Walls can range from
$125 per sf for drywall to $400 per
sf for full-glass demountable parti-
tions. The point is, there are myriad
products available to support the
build-out of hybrid spaces with
flexible, moveable systems in both
tenant suites and building lob-
bies. And both sides are taking full
advantage of them.
The wild card for tenants is fur-
niture.
Office furniture is rarely included
in the tenant improvement allow-
ance, which can lead to some
startling product choices. It is not
uncommon, for example, for a small
company to purchase IKEA – or sim-
ilar caliber furniture – for portions
of its build-out. While IKEA is a suc-
cessful worldwide brand, it’s just
not the kind of product that will
stand up to the constant wear in an
office environment. Worse, low-end
residential products are standing
in for well-manufactured mobile
brands. Think training room tables
and chairs without wheels. While
this type of tenant – or landlord,
for that matter – may save a buck
on the front end, a cheap product
choice can negate the flexible and
mobile characteristics for which
the space was designed in the first
place. It happens.
Furniture choices are almost limit-
less in today’s office market. Pricing
can range from $18 per sf to $60 per
sf or more. Most reputable manufac-
turers carry multiple lines at com-
petitive prices that meet or exceed
standards for wear. Both tenants
and landlords should bite the bul-
let and invest in those products
designed and tested specifically for
offices and common areas.
In fact, the cliché “you get what
you pay for” holds true for the
entirety of hybrid spaces. There is
enormous value at various levels
among professional product and
service providers. But there also is
a threshold that landlords and ten-
ants should caution not to cross
if the stated goal is well-designed
multiuse space.s
Market Trends