Growth is extremely exciting in small business and big business alike. Often times it comes when the business moves from about a 1500 square foot office into their first long term lease or when a tech firm expecting explosive growth takes on space for 15-20 employees.
Whatever the case may be, we thought we would expand on the old saying Cash is King, and let you know how much cash an office move like this may be!
For purposes of this example, we are going to use the following assumptions:
- Moving into Class A or B space
- A gross rental rate of $27 per sq. ft. in year one
- Equipping the office with new, middle of the road workstations for 15
- A conference room for 12
- The reception area
- Three private offices
- Small café
- Phones and data for 20 with Wi-Fi
- Conference room display and videoconferencing
We will also assume the startup of office supplies, the move, and we won’t even mention loss of productivity during a move.
Before you read on – what is your guess? $150,000 in year one cash outlay? $200,000?
Do you know how deep your pockets will need to be for this exciting growth step?
For all of the doubters in the math, be sure to read a short disclaimer at the bottom, and keep in mind these are averages, based on real life results in Chicago’s loop office market. (And if you are shocked by these numbers, just imagine what it would be in New York or LA!)
Disclaimer: For the major components of this example, we obviously used an example of all new furniture and furnishings. There are ways to spend less and certainly ways to spend more. Additionally, we assumed no rent abatement in this example, but in some markets and economic conditions, it is possible a client could get multiple months of rent abatement based on the term, credit worthiness and tenant improvements before move in.
photo credit: Lars Plougmann via photopin cc
