Factors to Consider When Your Space Needs An Upgrade
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThere comes a time in every organization’s life when its space just isn’t working. Building systems are aging, the layout is inefficient, and the floorplan doesn’t reflect the way employees want – or need – to work. There are decisions to make: should you renovate the existing space or move into a different building? Should you purchase a building or lease a space?
The process of defining criteria should include determining your "must-haves" – elements that are critical to your operations and mission – versus the "nice-to-haves." While each situation is different, here are a few vital factors to consider.
Culture and mission. When it comes to leasing a building versus owning one, there’s a preconceived notion that owning is better because it provides an asset. However, that only works if the space is going to hold or increase value. Take an honest look at your culture and your willingness to maintain and invest in a building. Net present value as a capital budgeting method is the most accurate method used to evaluate physical asset investment projects because it takes both risk and time into account. Many organizations discover that leasing allows them to spend more time and resources focusing on their missions, rather than maintaining their facilities. In addition, consider other aspects of your culture and how they impact space needs. For example, if your organization is rapidly changing, you may decide leasing provides more flexibility than committing to a new building.
Location. We have all heard the phrase, “location, location, location” as it relates to real estate. But your building’s context—and the priorities of your employees—can change over time. Consider if your existing facility’s location impacts you differently than when you first moved in. Is it convenient and accessible to employees and visitors, and is it where your business needs to be? Do you want your location to help increase your visibility? If you invest in a building, is it located in an area that has potential to increase in value over time?
Space needs. It’s important to think about your organization’s space needs, both now and in the future. How many people will you need to accommodate, and what is the space model for doing so? Does the facility provide the ability to grow if needed? How is your organization transitioning, and how will the space accommodate that? For offices, the decision to move from private spaces to an open environment changes the amount of square feet needed per person. For schools and universities, consider the square feet needed per student and if that has changed over time with evolving methods of teaching and learning. Engaging a firm to conduct a space audit can help you understand how—and how often—areas are truly used.
While the quality of a building’s structure and systems are critical considerations, the decision to move, lease or own goes far beyond that—it’s about understanding who you are as an organization and what solution is right for you. By taking a comprehensive look at your needs and an honest look at your culture, you can create a space that positions you for the future while making the best use of your capital investment.
Deb Kunce is managing principal at Core Planning Strategies.