Transforming warm shells or outdated office space into a tenant ready office can be a real challenge for commercial building owners and landlords, especially in markets with a surplus of unleased office space. Prospective tenants look for substantial tenant improvement (TI) allowances that can cost $105 to $140 per square foot or more for a conventional build out and furniture in Class A space. This cost combines an estimated TI cost of $75-$100 per square foot and furniture, fixtures and equipment (FF&E) at $30 to $40 per square foot.
In addition to these expenditures there is time that landlords and staff must devote to designing the space, selecting vendors and supervising the installation. In the back of the mind there is also the nagging question “how long will the tenants stay and what do I do with the space if they vacate it?”
The Tenant Ready Office™ Program
Although some tenants may favor turnkey solutions to readying space for occupancy the process is typically expensive and complex. Those drawbacks are now fully addressed by a program devised by ALUR.
ALUR is the premier provider of modular office furniture systems, plug-and-play power and data cable management systems, storage systems, and demountable ALUR Glass Wall and ALUR Dividing Wall systems. Together these components provide unsurpassed efficiency in readying warm space for occupancy while easily accommodating later moves, adds and changes desired by existing tenants or future tenants. An added bonus for landlords is that demountable walls, as with office furniture, qualify for significant tax depreciation allowances described in our post on IRS Section 179.
In addition to offering tenants stunningly attractive offices other benefits landlords enjoy when participating in this program include:
- Higher lease rates
- Quicker occupancy
- Green office products
- Contribution to LEED certification
- Future reuse of walls and furniture
- Top Flight Marketing to Attract Tenants
Landlords participating in this program also benefit from a top-flight landlord marketing program geared to getting tenants to sign on the dotted line. It begins with a comprehensive “all-in” 3-D conceptual plan for the space prepared by MAI showing walls, furniture, flooring and cabling. Other elements include an interactive marketing display, custom marketing material, online marketing and GREENGUARD® certified products.
Putting It All Together
The ALUR program allows landlords to provide most tenants a fully furnished space within the TI allowance in weeks rather than months. In terms of dollars, again using Class A space as cited above, the Tenant Ready Office program cost is $80 to $100 per square foot with the TI cost at $55 to $75 and program cost starting at $25 per square foot. That’s almost a 30% savings over conventional build out and furniture.*
When comparing this program to the aggravations inherent in a “do-it-yourself” office build out and considering that the program includes professional presentations and marketing that help landlords win tenants, it has tremendous value.* Cost estimates are based on 200 RSF (rentable square feet) per person, a 75/25 ratio open plan to private offices, one reception station, and one conference room per 5000 RSF. Add $4 - $5 per RSF for union installation.