In an effort to save money, many companies choose to make a few minor revisions to their office space instead of building new office buildings or undertaking “gut-and-rebuild” interior overhauls. Whether demising space to sublease a portion of it, or making changes that improve productivity, attract customers, or recruit the best employees, businesses are focused on ways to increase revenue with minimal expense.

We recently met with a new client, the principal of a law firm, who wanted to make some interior changes to their office suite. After she explained her wish list, I provided a ballpark construction cost estimate. Although doing this can nip a potential project in the bud, we don't want to see clients waste money on design drawings only for a project to be cancelled when the construction bids come in too high. “Why so much?” this attorney wondered, “We just want to move a few walls.” This is very a common question.

Moving walls is not as straightforward as many people think. Actually, walls are not moved at all. Existing walls are demolished, and new walls, in different locations, are built from scratch. Changing wall locations requires relocating HVAC vents, light fixtures, sprinkler heads, electrical wiring and outlets, telephone and data cabling, and sometimes moldings or wainscoting. Where existing walls are demolished, new areas of flooring and ceiling material are usually needed, because patching the wounds left by demolished walls would be unsightly. This might mean re-carpeting a room or an entire office suite so the carpet matches throughout.

Many construction trades are needed to relocate even one wall, and a General Contractor is typically hired to coordinate the necessary sequence of events amongst the various trades. The GC will hire framing, drywall, HVAC, electrical, cabling, flooring, and demolition subcontractors, and, of course, charge a fee for their services. A minimum amount is charged to make their efforts worthwhile, so small projects cost more per square foot than large projects.

Wall moves require a building permit. The building department requires a licensed architect to submit construction drawings for approval. A minimum amount of drawing work is required regardless of the project size, so design fees, like construction costs, cost more per square foot for small projects. For this reason, "moving just one wall" is often cost-prohibitive. There may be other, more cost-effective ways to accomplish the client's goals such as the use of partial-height walls which do not require permits and HVAC, light fixture, and sprinkler rework, or the use of furniture panels. Often, goals can be met in a different way than the client originally envisioned. There are potentially multiple solutions of varying effectiveness and prices. It is an architect's job to offer out-of-the-box ideas. The first thing I always ask myself is, "What is the simplest way to solve this problem?" Phasing a project is another way to keep costs manageable. We can develop a master plan which can be implemented in two or three phases over a couple of years. The total cost will be slightly more, but the smaller chunks may be easier to swallow.

Also most remodels occur in older buildings that are not up to code, and code upgrades are triggered by the permit process. Upgrading the toilet rooms, handicapped signage and parking, lighting, and the life-safety system are commonly required code upgrades. However, a hardship waiver is usually granted for small projects, capping the cost of code upgrades to 20% of the remodel cost. So a $50,000 remodel would cost $60,000 with the required code upgrades added. The building department may also require asbestos testing if there is any significant amount of demolition work. If asbestos exists, abatement in the area of demolition will be required in order to proceed with the project.

If a lease is coming up for renewal, it is common for a portion of remodel costs to be paid by the landlord. A property owner typically offers new tenants a “tenant improvement allowance” anywhere from $5 to $45 per square foot, and will do so for a renewing tenant as well. It makes sense to postpone a project, if possible, until a lease renewal can be negotiated.

Construction expenses can be depreciated, and it's a good idea to consult with your accountant, in addition to an architect, when determining the feasibility of a project. There are many creative ways to get the most for your money.