Corporate Renovation Tips
Oct 19, 2015 marked an era of change for Canada—a change to a Liberal majority government. What does that mean for the commercial real estate industry over the next four years?
Well, while the Liberal government is not planning to directly invest in the commercial real estate industry at this time, some of their mandates, if fulfilled, could have a significant impact on the industry.
For example, one of the main mandates of our new Liberal majority government is to largely invest into each province’s transportation infrastructure. This means improving and adding public transit options as well as improving local roadways and highways. For commercial real estate owners, improvements in transportation around their properties could improve the marketability of the office spaces available for lease. Commercial real estate owners would not be forced to lower their lease rates to attract potential leasers. Instead they would just remarket their available office space as “accessible to” multiple forms of transit. If successful, this could potentially lower the percentage of office vacancies, at least within Ontario.
Another Liberal government mandate is to significantly invest in Canada’s social infrastructure, that is, to improve where people live and increase their options/locations for child care. For commercial real estate owners, there is an opportunity to further improve the marketability of their lease properties by adding their properties on the list as potential hot spots in which daycare centres could be built, thereby getting in on the $6+ million that the liberal government plans to invest in this area.
Finally, the Liberal government wants to invest in renewable energy. This could be significant in causing new renewable energy companies to be formed or existing ones to expand into and throughout Canada. For commercial real estate owners, this could mean more potential leasers for their properties.
“Every dollar we spend on public infrastructure grows our economy, creates jobs, and strengthens our cities and towns… Government has a responsibility to act decisively and for the public good. Canada’s economic growth was made possible by building ambitiously. We must do so again if we are to transform our transit and transportation systems, create more liveable communities, and ensure that we adapt to a changing climate.”
Only time will tell what the true effect the Liberal government will have on the commercial real estate industry.
DJ McGauley and Associates Inc. is your Space Planning, Renovation and Facilities Management company of choice for the Toronto, GTA and surrounding areas. If an office move or reconstruction of your 2,000 – 25,000 sq.ft. office space is in your plans, contact us to arrange a no-obligation site meeting. Our friendly experienced team will work seamlessly with your staff to guide you through the process, allowing your employees to enjoy a productive, stress-free experience.
August 27, 2015, Liberal Party of Canada, “Trudeau commits to largest infrastructure investment in Canadian history”, https://www.liberal.ca/trudeau-commits-to-largest-infrastructure-investment-in-canadian-history/
Liberal Party of Canada, “Real Change: An Historic Investment Plan to Strengthen the Middle Class, Create Jobs and Grow Our Economy”, https://www.liberal.ca/files/2015/08/An-historic-investment-plan.pdf
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Have you ever looked at your office space and thought, “I think the kitchen/kitchenette area would look better and serve our staff more conveniently if it was shifted over a few feet”? Or maybe, “it should only take a few days to move into our brand new office space and be fully operational by Monday”? If you have, then you need a good project manager take care of the details and make it happen.
What is a good project manager”? Well for an office move, renovation or reconfiguration, a good project manager is one that looks at a project and thinks about all the details that no one else would think of to get from the project’s starting point to its desired end.
For example, my client that wanted the office’s kitchen area moved over approximately 50ft was surprised when I quoted her the estimated cost of $50,000 and responded, “Can’t you just unplug the kitchen unit from here, cut an outlet and plug it back into the new spot?” What she didn’t realize is that her request would require some extensive reconstruction and rewiring behind the wall before a new outlet could be created and her kitchen area successfully moved over the 50ft.
A good project manager sweats the details so that neither you nor your staff has to. In an office move, for example, a good project manager would call in, coordinate and manage all the necessary engineers and construction professionals to
- wire or rewire the electrical to PEng standards to better suit your business needs,
- build new offices or take down walls to create an open office space,
- install and test phone and data lines to accommodate complex phone systems, computer servers and connections to and from each planned work station,
- activate utilities
- dismantle and reassemble workstations
- pack and move furniture
- check and change all florescent light fixtures
- clean, shampoo the carpets, polish the floors, and wash the windows
- ensure office temperature is optimal for your staff and equipment
So, if an office move or reconstruction of your 2000 – 25,000sqft office space is a remote consideration, don’t sweat it. Instead let an office move/office reconstruction project manager sweat the details for you.
DJ McGauley and Associates Inc. is your Office Move, Reconstruction and Reconfiguration Project Management Company of choice for the Toronto, GTA and surrounding areas. If an office move or reconstruction of your 2000 – 25,000sqft office space is a remote consideration, consider contacting us to arrange a no-obligation site meeting. We guarantee that by the end of that meeting you will know all that would be required to make your office move/reconstruction project a successful reality.
One of the biggest mistakes businesses make when choosing an office space designer is basing their decision on a conceptual drawing or a block floorplan of an office space simply because they assume that the block floorplan is the exact way their completed office will be when the job is done. Not the case. While a block floorplan has its merits, the real decision-making factor is in the Permit Grade Design.
Similar to a block floorplan, a Permit Grade Design is a ceiling-view drawing of an office space with its different subsections blocked in—workstation area, closed in office areas, exits, washrooms, elevators, stairs, furniture, etc. However, the Permit Grade Design is drawn to scale based on the exact measurements and layout of your office space and furniture. With a Permit Grade Design, businesses and decision-makers will have a clearer view of what the final layout of their office space could look like. Presented with various Permit Grade Designs, businesses can make a more educated decision on which office space designer to hire and get the job done based on the best floorplan presented to them.
Permit Grade Designs are easy to obtain—just request one from the office space designer(s) you are considering to hire. In the short term, it may cost you a little money upfront to account for the extra time the designer takes to measure every aspect of your office space and furniture, but it would prove beneficial in the longer run because (a) you will gain a greater confidence in the office space designer you choose to hire, and (b) you will minimize the possibility of some common and sometimes costly problems such as furniture not fitting properly into their assigned office areas .
So, when it comes to hiring an office space designer based on a floorplan, remember that the Permit Grade Design is the real deal-maker!
There are many main factors that come into play when choosing a designer to create and “build” your ideal office space—three of which are pricing, personality and the plan (floorplan that is).
Pricing: This is obvious. You want the best quality for the lowest cost possible (the best bang for your buck).
Personality: Relatively obvious. You want someone who works compatibly with you and your team while working towards realizing your ideal office space.
The Plan: Deceivingly obvious. The designer that presents the most favorable looking floorplan is likely to be the professional you will want to choose. That is the premise most decision-makers bank on. However, many fall into the trap of making their final decision on the wrong floorplan.
Let me explain.
Designers vying for your business will likely present you with a block floorplan. As the name suggests, a block floorplan is a ceiling-view schematic drawing of an office space with sections “blocked” on the page to represent individual office and workstation areas, bathroom spaces, stairways, elevators, exits, etc. Some block floorplans may even include top-view drawings of furniture such as a desk or a sofa just to give an idea of furniture placement within each blocked space. Block floorplans are great for providing a conceptual view of how your office space could be laid out, but they do not represent an exact view of your office space simply because they are most often not based on the actual measurements of both your office layout and your furniture.
Now, a block floor plan does have additional benefits: it can reveal to a decision-maker what a designer is capable of creating and may even give some insight to the question of whether or not the designer can identify with your business needs in relation to your office space. However, as a cover letter is with a resume, a block floorplan should be seen as part of an introduction to a designer who could potentially provide a solution to your office space– not as the actual solution to your office space.
Block floorplans may help narrow your choices of designers to use for your office space, but the real determining factor would be in the permit grade design…but we will discuss that in another blog.
Does the office layout have any impact on the productivity in the workplace? Decidedly so. At a time where social collaboration and information sharing are the buzzwords in corporations, especially here in Toronto, the open space interior office design is being hailed as some kind of a 21st century corporate savior. But it’s not that easy. Cubicles for a design space have not entirely lost their point, and some open workspace companies have in fact deemed it better to revert to the former.
An open workspace, often praised as innovative and flexible, allows for easy interaction and facilitates creativity. The premise is, without the stifling cubicles, the hierarchical walls give way to free rein, enabling staff to work in teams and collaborate with each other. Ultimately, employees produce work not only at a faster rate but also at a better quality.
Needless to say, the open office space has worked wonders for SAP’s cloud computing teams. With everyone sitting at an open environment, employees can share ideas freely and without inhibition.
While the concept may have worked for one of SAP’s teams, where the employee count is relatively small and the job requires continually squeezing one’s creative juices, there’s evidence that it might not work at every organization. TIME published an article in 2012 about the demons that hound an open office. This includes unbearable office noise, lack of privacy, and increased employee stress. There’s a study to back this up, and it’s been published in the Journal of Applied Psychology.
This is why you might not want to totally rule out cubicles. Workspace innovators sometimes call them demoralizing, but it does provide a number of advantages that the open workspace does not. For one, it offers that valuable personal space. There will also be more space to stack documents and diagrams for easy reference. And you won’t deny, it’s much easier to focus when no one’s staring at you from across the table.
Ultimately, your choice of interior office design should depend on the nature of your company or product, the number of employees, and, well, what your employees think about it.
Corporate relocation is a daunting task that takes a lot of work. Three areas, in particular, require expertise and close attention: office design, systems furniture, and space planning. These are the same areas that D.J. McGauley & Associates pride themselves in, over their competitors in the corporate relocation industry.
Office Design that Makes Sense
Your employees will have countless questions regarding your planned office relocation, mostly centering on one aspect: the office design. For many, their office spaces have become their comfort zone. Naturally, they would be apprehensive about how the new office layout will look like: will their zone of privacy be decreased? Is the new office design comfortable to work at?
D.J. McGauley & Associates Inc understands the importance of office design, as it is one of the crucial steps in the relocation process. This is why feasibility studies and preliminary layouts are given precise attention. Your thoughts and ideas are crucial in the entire design process—and will be balanced with the need for a workplace design that makes sense and enhances productivity.
Precision in Systems Furniture
Your systems furniture has to be handled with care. You cannot afford any accidents or damage to the furniture, as it will disrupt business, and will cost you both lost profits and repair expenses.
Reconfiguring the systems furniture and installing new components must be done by a highly skilled and trained team. The team must be able to break down and seamlessly re-assemble the furniture from the old office to the new one. This is an expertise of the professionally trained team of D.J. McGauley & Associates.
Specialization in Space Planning
The problem faced by most businesses who relocate without corporate relocation specialists is most apparent in space planning. These businesses realize that their preferred office layout does not conform to the prospective floor plate, leading them to make many compromises.
D.J. McGauley & Associates makes no such mistakes, making use of engineering and structuring layouts to ensure that the layout you want matches with the space of your new office.
Without careful planning and a corporate specialist, the corporate renovation you’re planning might well drain your company’s finances. Most companies don’t realize it, but there are several tax deductions and tax credits by which they can benefit while undergoing a corporate renovation. With D.J. McGauley & Associates and the appropriate tax deductions, the costs of your office renovation will be much lower than usual.
One important deduction is in Line 8960 for expenses accrued in maintenance and repairs. This will allow you to deduct the cost of labor, maintenance and repairs for any maintenance work and minor repairs for the property you use to earn income. This applies to parts of your office that have not undergone major repairs but have nonetheless undergone maintenance and improvements. Excepted from this deduction is the value of your own labor and costs of repairs that are capital in nature, which are deductible in the next section.
Undergoing a corporate renovation will inevitably mean the acquisition of new capital assets, which may qualify as a deduction under capital cost allowance. This deduction applies to furniture, equipment, and technologies acquired for the use of business or professional activities. While you cannot deduct the entire cost of the property right away, you can deduct its depreciable cost over time depending on its estimated lifetime.
While undergoing a renovation, you might make use of supplies that would otherwise not qualify under the two preceding sections. This is where you can apply for a deduction under this section. Here, you can deduct items that the business used indirectly in its business, allowing certain refurbishments done to your workspace that are not directly related to your business goals to be deductible.
A renovation will require external professional advice or services that will entail consulting fees. For such expenses, you can apply for a deduction under this section. With this deduction, you can put to rest any fears that consultation with specialists will only increase the costs of your renovation.
If you plan on leaving the commercial building for a period of at least 90 consecutive days, you may qualify for a rebate of the tax you have already paid.
Make sure to tune in next week as we discuss Tax Deductions and Credits in Corporate Relocation in Canada.
Last week we began the discussion of renovation vs. relocation during the corporate expansion process. There are several questions that need to be asked and subsequently answered before deciding whether to relocate to a new office or to renovate your current workspace. To simplify the decision-making process, D.J. McGauley & Associates has prepared a checklist of questions that you should consider. The list continues below…
4. How will the expansion affect your bottom line?
Whether you relocate or renovate, you should first calculate the monthly costs it will entail. Will relocating increase your basic costs? Will renovating be more costly for your business in the long run, in terms of maintenance, because of the increase in lease?
Carefully evaluate which of the two options will increase the efficiency of the employees, offer better access to workers, and improve the visibility of your business among several other factors. It all boils down to how it will affect your bottom line, given the interplay of expenses and projected earnings.
5. Do you want to tweak or complete re-brand your company image?
The avenue of corporate expansion you choose will ideally affect your customers and clients as much as it will affect your employees. Many businesses have strategically chosen corporate relocation to jump start their company’s image. This relocation is just one of the many changes they undertook—along with offering new products and services, changing their vision, and sometimes, even changing their names! If you want a fresh start in the truest sense, then a corporate relocation may be exactly what you need.
On the other hand, some companies are reluctant to take such a measure but at the same time express a desire to contemporize their workplace and improve its layout, energy efficiency, and technology. This is where renovation is a more viable option.
6. Do you want no disruption to your operations?
Whether you choose renovation or relocation for your corporate expansion, you can’t lose sight of your business goals—the achievement of which is the entire reason why you’re expanding in the first place. For this reason, you need a corporate relocation and renovations specialist that will ensure that the expansion will go smoothly and will take into account the achievement of all your organizational goals. D.J. McGaulay & Associates will do this, and more; it will also help you understand your new facilities better and provide the assistance needed for post-relocation or renovation.
As companies become more dynamic and globalized, corporate expansion is inevitable. Corporate expansion usually involves either the renovation of the workplace or relocation to an entirely new facility. Both corporate relocation and corporate renovation can not only allow a company to meet the growing demands of the business, it can also encourage the workforce to move forward and achieve their goals in a better, more suitable environment.
At D.J. McGauley & Associates, we are often asked by our transitional clients to offer advice on whether it is time to renovate existing office space or relocate to a larger corporate facility. While the choice is ultimately yours, and each situation is unique, it is important to look at both sides of the coin before making such an important and game changing decision. This is why, over the next two weeks, we will be looking at factors that might help you decide whether it is time to renovate or relocate your office space.
1. Are you planning to have an expanded workforce?
If you’re planning to expand and hire a number of employees and the floor area of your current workplace cannot possibly accommodate your target number of employees, then it’s time to relocate. Otherwise, your expanded workforce will have to cram themselves in a tight office space and your business will suffer from decreased productivity. It is also imperative to find the perfect potential new space that fits your budget and at the same time will allow all your employees to comfortably work in their own spaces.
2. Do you want to improve your operations and systems?
The workplace environment is a major factor in employee motivation. If your current workplace is shabby, poorly lit, and/or made of subpar materials, what you likely need is a redesign of your office space—in which case you might want to go for a renovation.
A renovation is also in order if you want to upgrade your furniture and appliances, as well as the systems and technology required to perform employee tasks. It is important to set clear goals and outlines in order to integrate new equipment and systems into your current office structure seamlessly and with as little downtime as possible.
3. Is location a primary consideration?
For one reason or another, you may not be satisfied with the current location of your office. Maybe it’s because the location is not accessible to your target market, clients or expanding workforce. Perhaps it’s not near to your suppliers. Another reason most businesses cite is that they simply want to be in the central business district. For example, if you started your business in a small plaza on the outskirts of Toronto but you’ve always dreamed about relocating to that downtown Bay Street location, it might be time to realize your dream instead of putting your money into a renovation. In other words, if location is a primary factor in your corporate expansion, then corporate relocation should be your choice.
Still haven’t made up your mind? Tune in next week while we continue this discussion with a few more important points to consider.