Oct 04, 2016

Do You Need to Consolidate Your Space?

By Don Catalano

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The saying bigger is better applies to a lot of things, but office space isn't one of them. Every square foot of office space costs you money, so the last thing you want is to go unnecessarily big and raise your rental rates as a result. As you consider the commercial leases your company holds and work to optimize your portfolio, be on the lookout for these signs that you may be ready to consolidate and cut down on office space:

 

You Have Unused and Underutilized Space

Most companies will eliminate leases on entire spaces that they no longer use, but large corporations often have a shocking amount of empty space inside of occupied offices. Do a walk-through of all of your office spaces, looking for rooms and areas that are virtually empty. Find out from the management team of the location how often those unused and underutilized spaces are put to work, if ever. You may just discover that you have the equivalent of an entire unit's worth of space between all of your locations.

 

You Have Redundancy

Are you doing the same work at multiple locations? Is it necessary to have those employees spread out geographically? While regional deployment for certain departments might make good business sense, having the same department located in two different buildings within close proximity likely does not. Evaluate how you can rearrange things to consolidate your team in fewer locations.

 

Your Geographic Reach Has Changed

In the past, maintaining an office in a certain area may have made more sense than it does now. For example, you may have wanted to have an address in a brand new luxury building 20 years ago but now that building has aged and no longer has the same prestige. Eliminating that office might make more sense than continuing to keep it open just to have its street address on your letterhead. You may also no longer need to maintain an office in a certain location if you have stopped using a certain supplier or are no longer dealing with a particular client.

 

You're Experiencing Inefficiency in the Workplace

If it's taking your employees five extra minutes to walk to the printer or they have to go to another floor to interact with team members, your large office space could be causing inefficiency. Consider conducting an employee survey to find out how often your team members need to leave their workstations. Where do they have to go during the day and how long does it take?

 

You Are Gearing Up for Changes

Planning to introduce telecommuting or allow more employees to work at home? Are you getting ready to outsource something that you're currently handling in-house? If the way your employees work or the way you do business is set to change, it may be time to preemptively consolidate your office space before you end up with unused and underutilized space.

 

While consolidating office space is often a smart move for companies, there is always a danger of over-consolidating. Remember that you still want to leave your business some room to grow, so be sure to keep your future needs, not just your current ones, in mind when you are considering downsizing.

 

Other great articles to check out:

Tips for the Perfect Workplace

Mistakes to Avoid in Commercial Real Estate

Office Planning Tips for Corporate Tenants

 

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Topics: CRE portfolio consolidation, commercial real estate, space consolidation

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Don Catalano

Don Catalano

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