The Big Squeeze, “RIGHTSIZING”

by A. Grala – Real Estate NEW JERSEY, March/April 2009

Joel Ives, of Fair Lawn based Ives Architecture Studio (TIAS),  received an unusual request from a client.  “We designed an office for a business in Midland Park,” he says. “Our client was pleased with the design but also asked if we could make it smaller.  We did, and some small adjustments made a big difference in overhead costs.”

Rightsizing – a term traditionally associated with empty-nesters selling large homes and moving to smaller residences – is being used with increasing frequency in the commercial real estate these days.  “Companies leasing new space or renewing in place are paying careful attention to what the need and what they are getting,” Ives says.

With this is mind, its important to carefully examine all the spatial conditions that make up an office or any other type of facility when optimizing its usage.  “Consider workstations,” Ives says, “How much space does each employee really need?  Is a 10-foot by 10-foot cubicle necessary, or can they work well in an eight by eight one? In terms of square footage, the eight foot by eight foot cubicle represents a 36-square-foot space reduction.  Multiply that by several cubicles, then multiply that figure by the lease – many of which run fives years with a five year renewal option-and the difference can be significant.

At a glance cost savings chart

Clients  are looking for the effective or most efficient use of space and they’re replacing private offices with workstations.  There used to be many different types of workspace standards, from six feet to six feet and eight by eight and ten by twelve.  A single workstation that functions well can be utilized by several different groups – from administrative all the way up to management positions.  If a company needs to reconfigure different departments – or if its necessary to make adjustments for downsizing or expansions – everyone can fit into that station without rearranging the entire space

Reducing your square footage footprint will help.

Subleasing space was popular in past recessions and the same holds true now.  For its part, TIAS is involved in such fit-outs.  In Fair Lawn, two non-competing firms are designing offices adjacent to one another.  While each has their own entrance, they share a conference room, kitchen are and business equipment.  In Midland Park,  a commercial real estate brokerage firm considered sharing facilities with a developer.  “Again they have their reception areas, but behind the scenes they are sharing whatever they can, including workstations,” Ives says.  For companies already in a lease commitment, freeing up space can either enable staff growth without taking on additional square footage.  One current TIAS project involves a law office that was redesigned to create an empty area that will be rented to an accountant.  At another client’s office in Fair Lawn, TIAS recently reconfigured the office to allot 2,000 square feet for the sublease.

 Even the large industrial buildings the populate the New Jersey landscape are being sliced up into smaller components.  “We’ve noticed that companies don’t want as much warehouse space and even fewer are looking for space over half-a-million square feet,” Ives says.  TIAS is working on several projects that involve chopping up industrial spaces to self-contained units that can be leased or sold as condominiums.

But zoning issues will almost unbearably crop up and adaptive reuse projects. “You need to visit your architect and ask if it’s allowed and then get an approval,” Ives says.  “It’s something that needs to be looked at very closely because you don’t want to waste a lot of time with an idea that doesn’t have any chance of getting approval by the local authorities.” He adds that running into problems is fairly common, because zoning has more components than just the use.  “You might find that the use is allowed, but the building isn’t set back properly from a neighbor,” he says. “This triggers the need to go to the zoning board. The trend in office space is to fit more sardines into the can. If you try to do this on a site, you’re probably going to violate some kind of zoning rule.”

In today’s tough economy, it’s also more important than ever for tenant to understand how a particular landlord calculates square footage.  “Some measure wall to wall,” Ives says.  “others include the thickness of the wall in the square footage, while still others include portions of common area in the leasable square footage.” One of TIAS’s recent clients is a children’s entertainment center. The owner recently approached the firm to provide an exact computation of the square footage because it’s lease was coming due for renewal.” We remeasured the space and came up with a notable discrepancy that work to the owners advantage,” Ives says. “In another case we were involved as an expert witness in the shopping center related litigation over a similar discrepancy in leasable square footage.”

Design professionals are also looking to technology to help streamline the design process. Most major construction projects as well as the federal government now use a system called building information modeling.  Originally published in Real Estate NEW JERSEY and GlobeSt.com.  Republished, updated and edited here by www.ives-arch.com

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The Ives Architecture Studio (TIAS), based in Fair Lawn, NJ, has over 30 years experience in the disciplines of architecture, interior design & planning.

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