Lease Consultant -- Moving In

A typical commercial real estate transaction involves numerous relocation costs. In many cases, some of the most basic charges are overlooked.
The chart below provides an overview of the tenantís relocation expenses.

Estimated Tenant Relocation Expenses
 
53% = Remodeling
20% = Furniture
16% = Telecom & Computing
  5% = Legal
  3% = Moving
  3% = Architectural

The costs involved in relocation may be as much as 50% of the first year's rent. The tenant should be aware of these expenses before the process begins.

Remodeling Costs

Remodeling is almost always required to customize office space to meet a companyís needs. The chart below provides a range of fees with regards to customization.

 
Budgeted Cost/PSF
  Low
High
Hard Costs1 $35.00 $65.00
Soft Costs2 4.30 6.90
Project Manager 2.50 5.00
General Conditions3 3.50 5.85
General Liability Insurance 0.53 1.63
Change Orders 1.75 6.50

    Subtotal $47.58 $90.88
 
1Hard costs directly improve the physical premises, e.g., a new wall.
2Soft costs are fees needed to complete construction, e.g., architectural designs.
3General conditions include general contractor fees for overhead and supervision.

For more information on the construction process, see our Remodeling Section.

Furniture Costs

The prices listed below include delivery and installation.

 
Budgeted Cost/PSF
  Low
High
Standard Office Furniture $15.00 $30.00
Signage 0.25 0.40
Accessories (baskets, mats, etc.) 0.15 0.25
Window Treatment 0.60 1.00
Refurbishing Furniture 1.75 6.50
Artwork / Decorations 0.20 0.40

    Subtotal $17.95 $38.55

Legal Fees

The real estate attorney will review your lease and negotiate the legal terms.

 
Budgeted Cost/PSF
  Low
High
Outside Legal Fees $1.50 $3.00
Moving Services & Costs

Moving agreements are fairly standardized in the industry; terms rarely differ among movers or across geography. The main difference to consider is that some movers use set rates while others state an amount not to exceed. With regard to the latter, you may actually pay less than the price quoted.

Once you know your move-in date, immediately reserve the freight elevators at your old and new locations. Moves usually take place during off-peak business hours; coordinate the move-out / move-in schedule accordingly to avoid costly overtime charges.

Allow three weeks to interview and negotiate with different moving companies. Note that you may need building approval of the service company you choose for your move. Only interview companies that can provide a certificate of insurance, and have your insurance agent analyze the certificate. Also ensure that you too have insurance for the move and that your coverage for the new location begins substantially sooner than upon arrival of the first box to the new space. At this time, plan a schedule and notify employees of their involvement in the move.

Inspect the new location to make sure it is in move-in condition. A month before your move takes place, reconfirm move-in / move-out dates and times with the moving company and the landlords at each premises. This is a good time to acquire your moving certificate from the service provider.

The day before your move, reconfirm the details with all the parties involved. Verify with your insurance agent that you are insured for the move and for both locations. Make sure that you either have keys for your new location or that a building representative is on-site to give you access.

 
Budgeted Cost/PSF
  Low
High
Physical Move $1.50 $3.00
Transit Insurance 0.12 0.18
Equipment Preparation 0.06 0.10
Move Consultant 0.20 0.30

    Subtotal $1.88 $3.58

Telecommunication & Computing

Before signing the lease, it is essential to hire an engineer to examine the existing wiring at your new location. Your engineer must determine if the current wiring can accommodate your future needs -- before the wiring is ordered to ensure that you obtain the correct services.

Allow six weeks on your timeline to obtain service quotes and to compare provider services before making a decision. Call and order installation as soon as you decide on the type of service. The companies that provide this service must coordinate with your local phone company to schedule installation. It can take as long as three months for services to be installed.

The planning and installation of telephone systems and equipment should take place simultaneously with the communications and wiring. Coordinate the installation date for these services.

Communication is broken down into voice and data segments: for example, a T1 line can be used for data (1.5 million bits per second connection to the internet backbone) or for voice (24 direct dial lines).

Typically, your telephone service provider will install the cabling for both the telephone and data. Make sure you have more wiring installed than your immediate needs. Anticipating your companyís growth will save you time and money.

Telecommunication & Computing Costs

Below is a chart of approximate cost for computer, telephone, and cable equipment.

 
Budgeted Cost/PSF
  Low
High
Telephone / Switching $2.00 $3.00
Cabling (voice and data) 1.50 2.50
Computer Equipment1 12.00 16.00

    Subtotal $15.50 $21.50
1Assumes $3,000 - $4,000 for each desktop unit
 and 250 SF per person

Architectural Fees

Your architect will help you determine and select the amount of space required for your needs. Upon selection of your new space, the architect will design the layout and oversee construction. As you will see in the remodeling section, architectural and engineering fees are often referred to as soft costs.

 
Budgeted Cost/PSF
  Low
High
Architect $2.50 $4.00
Engineer 1.50 2.50
Reimbursables + tax 0.30 0.40

    Subtotal $4.30 $6.90