Commercial 101 / By Serena Solomon / September 12, 2017
Commercial Guide: Your Office Renovation Budget
Ready to start or graduate your business or medical practice to your next office space? Here’s how to cost out a renovation
Office build-out by Sweeten contractor Paul in Manhattan
Perhaps you have outgrown your home office or coworking space or maybe your business is in need of a fresh location or configuration. An office renovation will give you a chance to dream long term about where your business is heading and interpret that direction into blueprints for a space that will facilitate growth. In this guide, we’ll consider the many pieces of your office renovation cost.
An office renovation can be as simple as an improvement project that is negotiated between the landlord and the tenant before signing a lease. Often these are very basic renovations such as fresh paint and some new walls that the tenant ultimately pays for in the cost of the lease.
If you are after something more custom, there are, of course, many variables that will determine the cost per square foot. Is the location a new or old building? Was it previously an office? What part of the country will your office be in? What are your business needs? And what quality of work will match those needs?
A new building with a basic build-out of carpet, paint, and lighting, including equipment such as a photocopier and coffee machine costs about $40 a square foot, according to 42Floors, a national search engine listing real estate for office space. On the higher end of the scale, a build-out with finishes such as wood veneer doors and a stone reception desk could hit $100 to $150 a square foot. The office renovation cost could also increase if you are renovating in an older building where quirky spaces and issues, such as slanted floors, must be taken into account. Whatever your tastes and needs, here are budget line items to consider.
Most people will choose to hire an architect or designer. Expect that to take 20 percent of your renovation budget, according to Sweeten architect Carla. That could mean $40,000 of a $200,000 budget. Bringing in a design professional early on may save heartaches in the long run. Along with the overall look and feel of the project, architects can also take care of code issues, assess if the workspace size will be comfortable for the number of employees, ensure handicap accessibility, design custom work areas, and more. “You can express creativity and individuality,” said Carla.
Lighting and electrical
While planning your office remodel, first consider who will be coming to your office, said Anthony, a Sweeten general contractor. If clients are making regular visits, “you don’t want it to look like you’re working out of a bomb shelter,” he said. Decent lighting is one of those elements you can use to impress your clients, an impression that will hopefully lead to more business. Basic lighting can cost about $250 a point (a light with a switch is considered two points), according to Anthony. For each 110 volt outlet, put $150 in your budget and don’t forget things like lighting for emergency exit signs, which are about $300 each, according to the website How to Move Your Office.
Millwork and finishes
This is another area where you can keep costs down while still wowing potential clients with your new office space. “I’ve done work in lawyer’s offices where inside it is a vanilla box with cubicles that the clients never see,” said Anthony. “Then you have a lobby and conference room that is decked out with custom wood work and imported marble.” One sample office budget at Buildings.com put the cost of millwork and finishes at about $25 a square foot. The total office renovation cost for that build-out came to $90 a square foot.
Similar to lighting and millwork, walls can differ greatly in cost. A basic partition wall that is ten linear square feet could cost around $60. Glass walls are not often priced per square foot and are instead sold as a package. However, using executive design elements such as glass walls could push the entire cost of your office renovation towards the $150 a square foot range.
Commercial-grade carpet or a vinyl tile can cost as little as $4 a square foot to supply and install. Wood plank floors can cost around $7 a square foot for a 5,000-square-foot office. If there will be an industrial theme in your new office, then concrete flooring might be an economical option starting at $2 a square foot, according to the Concrete Network.
Many office buildings will have a communal bathroom area on each floor for tenants. If there is no bathroom, you must install at least one. US code requires one bathroom per one to 15 staff members. That climbs to six bathrooms for 111 to 150 staff. A single restroom could cost a little under $15,000, according to How to Move Your Office. If your staff likes to shower at work after jogging or riding into the office, a shower (make sure it is handicap friendly as per the Americans with Disabilities Act), will cost just shy of $6,000.
An office kitchen can help team members feel appreciated. In the office renovation cost outline at the end of this article, Sweeten contractor Anthony installed an office bathroom and kitchenette. The total budget for those two items was around $16,000. The kitchenette, which consisted of a sink and fridge, took about 25 percent or $4,000 of that budget. Because the kitchenette and the bathroom were near each other, the project made double use of the plumbing to reduce overall costs. “It really depends on how much plumbing and millwork you need,” said Anthony. “You could have a simple cabinet or a whole countertop with a microwave, fridge, and sink.”
Depending on the building you are leasing, this could (hopefully) already be in place. If there is a sprinkler system, it is well worth spending a few hundred dollars to have an engineer inspect it to ensure it works and that it is up to current code. Installing a system from scratch in a small to medium-sized office could set you back between $5,000 to $10,000, according to Anthony. He estimates that a sprinkler system will cost about $200 per sprinkler head, plus an additional $2,000 to have a plan drawn up as well as permits and inspections.
Keeping an office well ventilated and at a comfortable temperature can have a big impact on employee productivity. So, installing an HVAC—heating ventilation and air conditioning system—might be worth it if there isn’t already one in your new location. An HVAC system could cost between $15 to almost $30 a square foot or 15 to 20 percent of your entire office renovation cost, according to the Builder’s Association.
For a typical office build-out, labor should take about ten percent of your entire budget. There are also the geographic differences in labor costs. The cost of labor in New York City is 70 percent higher than the national average, according to Fixr. Philadelphia is 40 percent and Dallas ten percent above the national average. Charleston, South Carolina, and Scottsdale, Arizona, are both one percent below the national average.
Certain factors in individual cities can add another variable. For example, in New York City, there are union and non-union buildings. For union buildings, tenants are required to use union labor, which can almost double the office renovation cost of a project, said Joseph, a Sweeten general contractor. The basic build-out of an office in a non-labor building can be as little as $40 a square foot or as much as $100 a square foot in a labor building, according to 42Floors.
Here, a real budget for a 5,500 square-foot office renovation in NYC from Sweeten contractor Paul:
A new office can mean an exciting step forward for a business whether you’re a start-up or an established company in need of a new environment for your team. Enjoy dreaming up the future of your company and your new office space.
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Sweeten handpicks the best general contractors to match each project’s location, budget, and scope, helping until project completion. Follow the blog for renovation ideas and inspiration and when you’re ready to renovate, start your renovation on Sweeten.