What’s that cool space going to cost you?
Learn how much help your landlord may be willing to offer and where to spend your money
See where you should be spending your valuable dollars. Open ceilings, flexible workspaces, public art galleries, concrete floors, exposed brick and a wicked workout room. Oh, and a bar with either caffeine or kegs.
Who doesn’t want to work in the coolest tech office spaces? You’d think stuff like that would cost a tech company big time when it comes to creating that space, right? Maybe not.
1. When it’s all said and done, a tech office is 15% cheaper than a traditional office space
Expect to pay 15% less than a comparable traditional office suite, or nearly $30 per-square-foot less. However, keep in mind that while you’re saving on physical construction, you’ll probably be spending a bit more on furniture, audio/visual, and technology amenities.
2. Hard costs and materials are 21% cheaper
Since tech offices usually have open floor plans with fewer private offices and more common areas, the amount of physical material needed is much less — cutting over $20 per-square-foot.
3. Plan to spend more on furniture, technology, and audio/visual equipment
The cost of equipping the office with advanced tech equipment and other high-tech gear makes up for the cheaper aforementioned costs — upwards of $50 per-square-foot. Just remember, this is the stuff that helps to create the amazing, collaborative atmosphere your employees are looking for.
When it comes to what you will likely pay out of pocket to fit-out office space, landlord-provided tenant improvement allowances (TIs) have a huge impact. Essentially, a low TI allowance in a given market, means that tenants are expected to pay more out of pocket for their fit-out, and vice versa. Ultimately, TI allowances can vary significantly market-by-market, and can have a key role in budgeting a given project.
Just look at landlord-funded TI allowances in Washington, DC ($95 p.s.f.) versus Sacramento, CA ($20 p.s.f.) — a significant gap, and one that actually makes it cheaper to fit-out a tech office in DC rather than Sacramento. A little surprising, right?
Here’s how it breaks down. When taking in to account both local costs of construction and market-specific TI allowances, these are the 10 markets where you’ll pay a premium to outfit that great tech space.
But these 10 markets might surprise you. They feature significantly cheaper build-out costs than the U.S. average.