Office restacking is a growing trend among many businesses after the pandemic rattled our economy and changed the workplace as we know it. Companies are taking a careful look at their commercial real estate portfolio to assess what makes sense for their business in this new environment. Before COVID, office restacking was a common business strategy used to reconfigure space needs to improve efficiency.
The main types of restacks include:
A consolidation of space that reduces square footage, condensing multiple floors into fewer floors or multiple buildings into a single building.
A major refresh of current space to maximize workflow, reconfigure the use of existing space or roll-out a new brand concept.
Cosmetic upgrades to an existing office to refresh a dated space with new finishes, carpet and paint.
In today’s post-pandemic environment, restacking has become the strategy to address new challenges:
Adjusting office space to adapt to the hybrid work model. How a hybrid environment operates depends on the company, but it could include fewer permanent onsite employees or staggered schedules. A hybrid workplace might be almost entirely remote with occasional in-person meetings, or it could be almost entirely office-based, with a few remote workers. Ultimately, each hybrid model will require different office space configuration needs to maximize workflow, in which case, an office restack could be the right solution.
Space consolidation. Downsizing is an unfortunate reality of the pandemic, and the empty seats in an office not only pose a threat to morale but can also affect efficiency and productivity. Restacking offers an opportunity to reshuffle an office configuration to better utilize unoccupied space.
To take advantage of generous lease concessions provided by landlords. Vacancy numbers are currently high, and many landlords are offering attractive incentives to encourage tenants to stay. These incentives include longer periods of free rent, higher tenant improvement allowances, shorter or more flexible lease terms, reduced or waived amenity fees and more. Generous concessions offered during lease renewals can sometimes offset the cost of restacking over the cost of a full relocation.
The decision to relocate or restack can be a complicated process that involves thoroughly evaluating your current space to compare intrinsic benefits to hard dollars, factoring in existing conditions with landlord allowances and more.
Relocation demands time to select the right partners, conduct a site selection, lease negotiations, internal move management, external communication and so on. This can involve additional fees and permitting that might be saved through a restack decision.
On the other hand, restacking can also be as (or more) costly and time consuming as relocating. Factors that increase schedule and cost include swing space availability, the quantity and complexity of phases on your project, the amount of off-hours work required and overall project duration. The best way to assess your unique situation is to involve a contractor that can create a detailed cost study with you to help decide which strategy is most beneficial for your business.
From a construction perspective, restacking offers several opportunities to save time and money.
The biggest advantage of a restack is the ability to reuse existing offices, meeting rooms, break rooms, IT rooms, reception areas and other features. If the current space configuration works, and a simple cosmetic upgrade is all that is needed, a restack offers the ability to avoid major mechanical, electrical or plumbing upgrades, ultimately saving costs.
When a restack involves multiple floors of work in phases with similar design and construction plans, contractors have the advantage of submitting plans for all phases at once. This gains early material approvals and early identification of long lead items, which significantly reduces the time spent on the review process. Creating consistent plans for each phase allows for buying materials in bulk to be stored and used for multiple phases, which also saves on costs.
Contractors also have the advantage of building downhill momentum, which comes from applying experience from building the previous phase (or floor) to the upcoming phases. This allows continuous efficiencies to be created by the contractor and the client’s vendors to shave time off the schedule.
While an office restack can offer some construction cost savings, it also requires very careful planning and coordination to execute. Here are important considerations that are commonly overlooked and can make or break the success of your restack project.
The most significant edge to have in a restack is the use of a swing space, or temporary workspace for employees to occupy throughout construction. Spending a little extra time to ensure the swing space is not only functional, but truly comfortable will have surprising results on productivity and morale. This can involve something as simple as creating an alternate breakroom. A quality swing space ensures business continuity and prevents the need for overtime labor costs to work off hours. If a swing space is not available, your contractor will need to divide your office into sections, shifting people as minimally as possible. This will likely lead to some off-hour work to coordinate phasing to limit business disruption.
Bring in your IT teams early in the planning process to take an active role in ensuring business continuity throughout all phases of construction. Set up redundancy in your technology and network connectivity and run several pre-tests before decommissioning existing systems. There is no greater disruption to business than a network that is down.
3. Be mindful of the existing conditions of your space
The current condition of the space including restrooms, drywall, floors, window shades, hot and cold issues, can either save, or cost you a lot of money. Engaging a project team to evaluate existing conditions will be beneficial while re-negotiating lease terms to identify items that should be covered by the tenant improvement allowance. It will also determine if anything needs to get removed, relocated or demolished.
4. Don’t take safety and protection for granted
Carefully plan the sequence of the project and think through its impact on employees. This will allow the contractor to demark construction zones and develop plans to build protection barriers and partitions with negative air machines to block out noise and dust and provide regular clean up. A comprehensive safety plan that satisfies both the business and contractor’s needs is key to saving time, money and ensuring minimal impact to business continuity.
5. Be realistic (not overly optimistic) in your timeframe
Restacks often involve shuffling entire teams to new areas as the space is being built. Planning enough time for the move itself is critical to business continuity. Allotting a weekend to complete the process is not realistic. Things to be mindful of that take time to resolve are technology connectivity, furniture knockdowns, and the relocation of necessary files, tools and personal items for employees to be comfortable and productive.
6. Manage expectations through clear communication
Partner with a team that has experience managing restacks. Phased, occupied projects require experience and careful attention. Having a partner that can provide creative ways to communicate major milestones in construction progress, especially the activities that may cause disruption (dust, noise, odors) to your team is vital. This seems like a no-brainer, but can be easily overlooked, causing backlash and delays.
7. Have a plan for orphaned furniture
Depending on the lease agreement, tenants may need to prepare a strategy to deal with the left over furniture from a previous space. Options here include recycling, liquidation or donation to a non-profit or organization in need.
Over the past 20 years, Andy has established a name for himself in the Chicago construction market, building some of the region’s largest, most complex and creative spaces along with an array of new construction and heavy renovation projects in Illinois and California. He is known for being a dynamic leader, big picture planner, a true collaborator, aggressive competitor and out-of-the-box thinker. His reputation for creatively expediting timelines and tackling complex projects is second to none. Andy graduated from the University of Illinois Urbana-Champaign with a Bachelor of Arts Degree in Philosophy and a commercial pilot’s license. The son of an architect, Andy’s passion for construction was ignited by his job as a laborer during college. He helped grow his former company from approximately $40 – $400 million and became known for changing the market’s pace and expectations by flawlessly completing large projects in record time and under budget.