How to Find Space for Your Business

Planning an office move: Begin Required Construction

By  David Haug

Your Office Move is Entering the Construction Phase

You’ve made it to Weeks 11-17 of your office move. Your plans are in place, your permits have been granted — now it’s time to begin construction.

For this part of the process, you’ll need to keep a close eye on your bank account. Costs of labor and materials are up over last year — and in some cases, they are a lot higher.

Office move construction

Construction labor costs

Labor costs will take a bigger bite out of construction budgets this year thanks to a shortage of workers. The construction industry cut its labor force by nearly 40% between 2006 and 2011. Even though construction is a booming industry again, the workers haven’t returned. Additionally, fewer skilled workers are coming out of tech schools, so the end of the labor shortage isn’t in sight. That means that workers can command higher wages, so more of your construction budget will go toward paying for labor than ever before.

Cost of construction materials to consider during an office move

Meanwhile, the cost of materials also continues to rise. Softwood lumber prices are especially high because of the expiration of a trade agreement with Canada at the end of 2016. But prices for diesel fuel, steel, copper and wallboard also are increasing. At least some of the rise in prices can be attributed to a ripple effect of supply and demand patterns: costs of current and future projects are on the rise, so the cost to the developer goes up, which means the cost to the consumer goes up, so consumers spend less, which means real estate investments goes down.

What to do

All of this means remodeling or constructing a new office will cost more this year than it did last year. And that means you must be strategic about how you’re spending your money and where you’re cutting corners to save cash. (If you’re looking for some ideas on how to save money on some of your construction materials, this might be helpful.) Talk to your contractors and be realistic about your budget.

We can help!

If you haven’t downloaded it yet, you can get our Lease Timeline Checklist to help you plan your new office. This is the type of framework we use for all our clients at LCRE. We will provide a customized version for you based on your specific needs in retail, office, or industrial.  We help our clients find the best spaces to lease and also the best properties to purchase.

About Lighthouse Commercial Real Estate

Did you know Lighthouse Commercial Real Estate offers commercial real estate agent matchmaking services? If you have a commercial real estate agent need, visit Lighthouse Commercial Real Estate and request a free initial consultation. We will answer any questions you could possibly have about commercial real estate. Once we understand your commercial real estate needs, we’ll provide you with the guidance you need to choose the top commercial real estate agent for your needs. Contact Lighthouse Commercial Real Estate today!

David Haug

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About the Author

David Haug is a Madison WI commercial real estate broker. He is passionate about helping clients, customers, and friends succeed in finding property, selling and leasing property, and investing in real estate. He is also a raging Badger fan. #OnWisconsin Baby!
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