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Do you have an office construction project but aren’t sure where to start?

This guide will tell you everything you need to know about managing your office build-out. We will guide you through every step of the process, from the initial design and estimating costs to how to save the most money.


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Dustin Hogzett | Commercial Project Management in Austin, Texas | AQUILA Commercial About the Author

Dustin Hogzett

Dustin is a beloved figure among AQUILA’s project management clients. His incredible work ethic, initiative and easy-to-work-with personality make him everyone’s favorite person to work with.
Chapter 1

What Does the Office Build-Out Process Look Like?

So, you want to build out your office space but you don’t know where to begin. Building out your office space can be overwhelming, but hiring a project manager who can help you make a plan and lead you through the process can keep you on track.

Here is the process that a project manager will help guide you through, from design to move in.

 Office Build Out Timeline
 

1. Design

Ideally, you should begin your design process during the site selection process, before you even sign a lease. You will work with a design team to define your vision, develop concepts and eventually finalize construction documents that you can use for bidding and permitting.

Discovery

During the design discovery phase, you will define the scope of your project. Then, you will find architects, engineers and other consultants that fit the needs of your project.

Conceptual Design

In this phase, your project team will begin providing test fits, budgeting and scheduling. 

A test fit is a floor plan produced to ensure that the spaces you are considering leasing will be able to accommodate your company’s needs. This will help you visualize your space and estimate the scope of construction that will be necessary. 

Project Planning

A project manager will then make a preliminary budget and schedule for the project based on these test fits. All of this will help you make an apples-to-apples comparison of your options and assist you in your lease negotiations. Knowing what a project will cost can inform how much tenant improvement allowance you should negotiate for.

Design

Once you sign your lease, your project team will begin to design the look of your space such as the layout, style, finishes and more. This is when you will choose paint colors, countertops and your office layout.

Design Approval & Permitting

Once you have approved your final design, your project team will put together the final construction documents that will be used to bid out the project with vendors, submit to the city for permitting, and to reference during the actual construction process.

2. Bidding and Permitting

In this stage, the construction drawings need to be approved by your city’s permitting office and your construction team should be formed.

In Austin, a permit is required any time you plan to “erect, construct, enlarge, alter, repair, improve, remove, convert, move or demolish” a building or space within the City’s jurisdiction. This means most build-outs will need a permit from the City of Austin before beginning construction. Your project manager will know if you need one or not.

Rule of thumb: If you’re knocking down or adding walls, you will need a permit.

If you are in Austin, your project manager will likely recommend hiring a permit expediter to help you get through the City’s permitting process more efficiently. The permitting process for a typical build-out usually takes six to eight weeks, but other factors such as jurisdiction, time of year, and other factors can affect it.

In some cases, there are projects with reduced scope and size that can qualify for a permit within a few weeks. Your project manager will know how long it will take to get a permit for your project based on the size and scope. Consult with them to get a more accurate estimate.

Want to learn more about the permitting process in Austin? Read our article The Expert’s Guide to Getting a Permit for Your Office Build-Out in Austin, TX to learn more.

3. Construction

Once you have your design finalized, your permit and your team, you are ready to begin construction.

The timeline for your construction can range from a few weeks to several months depending on how large the project is.

Construction will vary based on your needs and the size of your space. The process may include:

  • Demolition of existing demising walls and fixtures
  • Framing and drywall
  • Ceiling repair and replacement
  • Finishes including paint and flooring
  • Millwork
  • Mechanical systems
  • Electrical power and lighting
  • Plumbing for restrooms and breakroom areas

Once construction is complete, the furniture, fixtures and equipment (typically referred to as FF&E) will be installed before you move in.

Before you move in, you will do a final walk-through with the project team to pinpoint anything that doesn’t match the construction plans or isn’t up to standard. These items are added to a “punch list.” The general contractor or vendor responsible for each item is required to complete or correct each issue before they receive final payment. After everything is corrected, you will do one last walk through to make sure everything is as it was planned.

A punch list is a document prepared near the end of a construction project listing work that has not been completed according to the plans that the general contractor must complete prior to the final payment

After your general contractor schedules the city inspection and obtains your Certificate of Occupancy, it’s time for your last walkthrough. Once you confirm everything is to your satisfaction, you are ready to move in.

Read the full article here: What Is the Office Build-Out Process?


Office Build Out

Office Move Checklist

Whether you're just beginning the process of looking for new office space, or your lease is signed and the move is just around the corner, this comprehensive office move checklist will guide you through each step of the relocation process. Make sure no item, big or small, falls through the cracks by following this checklist from day one.

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Chapter 2

How Long Does an Office Build-Out Take?

The build-out process can be lengthy, and the total time it takes depends on a variety of factors, including the condition the space is in, how big the project is and what the scope of the build-out is.

Shell Condition Build-Out Schedule

A shell space is an unfinished space in an office building. Shell spaces usually require installing all of the interior features that turn an empty suite into an office, including:

  • Framing and drywall
  • Doors, frames and hardware
  • Ceilings
  • Finishes including paint and flooring
  • Millwork
  • Mechanical systems
  • Electrical power and lighting
  • Plumbing for restrooms and breakroom areas

Shell space build-outs typically take up to eight months.

 

Commercial Real Estate | Shell Space Example | Office Build Out

A typical example of shell space in a new development.

Here is a sample timeline for a 20,000-SF shell condition space requiring a Class A quality finish out.

Timeline for Build-Out of Shell Space
Design/Architecture 10 Weeks
Bidding & Permitting 6 Weeks
Construction 16 Weeks
Total 32 Weeks (8 Months)

Second-Generation Space Build-Out Schedule

Second-generation space (2nd Gen) already has ceilings, millwork, plumbing, etc. and the goal of the build-out is typically geared towards achieving a new aesthetic.

 

2nd Generation Commercial Real Estate Suite | Office Build Out

An example of a typical 2nd generation space, including interior walls, electrical outlets, data drops, millwork, paint, carpet and more.

Second-generation build-outs are usually completed more quickly than shell spaces since there are fewer renovations to be done.

Here is a sample timeline for a 20,000-sf second-gen space requiring a Class A quality finish out:

Timeline for Build-out of Second-Generation Space
Design/Architecture 6 Weeks
Bidding & Permitting 4 Weeks
Construction 10 Weeks
Total 20 Weeks (5 Months)

Ultimately, the time it takes to build-out your space depends on the beginning condition of the space and how much work you want done.

Read the full article here: How Long Does It Take to Build-Out or Renovate Office Space?


Office Build Out Timeline Sample Construction

Build-Out Construction Timeline Template

How long is your office construction or renovation project going to take? From the real estate process of finding a new space to design, construction and move-in, this project schedule template will help you plan each step of the process.

Download Your Build-Out Construction Timeline Now

Chapter 3

How Much Does it Cost to Build-Out Office Space?

With all the moving parts of an office build-out, estimating the price of building out office space can be overwhelming. Even getting quotes from construction companies and other vendors can be nearly impossible for individuals who don’t do this every day. 

Project managers put together budgets and bids for hundreds of tenant improvement projects and office build-outs, so they are familiar with pricing, which is a major reason we recommend hiring a project manager

So, where should you start, and what should be included in your budget?

What Will Be Included in Your Office Build-Out Costs?

Budgets for office build-out projects are broken down into five major categories: hard costs, soft costs, contingency budget, and projects managment fees and vendor costs. First, let’s understand the difference between hard and soft costs.

Hard Costs

Hard costs are usually the physical renovations to the space. Most of your budget will be dedicated to hard costs, but these can be hard to estimate without all of the details of your project already figured out.

Common hard costs our project managers see in Austin include:

  • Paint and carpet
  • Electrical
  • Plumbing
  • Mechanical/HVAC
  • Framing and drywall
  • Doors/frames/hardware

These costs will vary depending on the number of changes and the quality of the materials used.

Soft Costs

Soft costs are usually easier to estimate than hard costs. These costs include the expenses and services necessary to design and permit your project. The total cost will vary depending on the scope of the project.

Unlike hard costs, soft costs are not directly related to the physical building materials and labor.

Common soft costs include:

  • Architectural designs
  • Mechanical, electrical and plumbing design (MEPs)
  • Permit expediting 
  • Legal fees

For a more in-depth look at soft costs versus hard costs, read our article Quick Answer: Hard Costs vs. Soft Costs for Office Build-Out Budgets.

Vendor Costs

Vendor costs are the rest of your miscellaneous expenses and depend on your needs and the size of the project.

Vendor costs can include:

  • Furniture, fixtures and equipment (FF&E)
  • Cabling
  • Security
  • Moving
  • Signage

A Contingency Allowance

An experienced project manager will include a contingency allowance in case you incur any unexpected expenses. 

You should include this in your budget even if you don’t hire a project manager.

For projects in “shell” condition, this allowance usually falls between 5% to 10% of the overall project cost, while remodels usually have contingency allowances of 10% or more since you are more likely to encounter unexpected issues in second-generation spaces.

A Project Management Fee

This is the last part of your budget, but one of the most important. The project management fee is generally 3% to 5% of managed costs, but can vary depending on the project size.

Though this might seem like an additional expense, a good project manager will typically save you money on your overall project cost, and help you avoid making costly mistakes.

What Can Affect Your Office Build-Out Costs?

1. Condition of the Space: Is your space second-generation or shell space? Second-generation space may need to have minor renovations done, but typically the major infrastructure will be in place. Shell space often requires major improvements to the space’s look and infrastructure. Because of this, shell space usually requires a larger budget than second-generation space.

2. Size of the Space: If you have a small space, fewer materials will be required, but if you have a large space, you will have lower costs on a per square foot basis.

3. Quality of the Finishes: Do you want high-quality woods or will laminate work for your space? High-quality finishes will cost you more but may be necessary for your business.

4. Office Layout & Amenities: A large number of private offices or conference rooms will drive up costs due to the extra walls and wiring. Open floorplans will usually have lower costs.

5. Timeline: Planning ahead can help you stay in budget and starting late or having major changes in the middle of the build-out can add on major costs.

Read More: 5 Things That Affect the Cost of Your Office Build-Out


Office Build-Out budget Template

Office Build-Out Budget Template

Whether you're moving to a new space or renovating your existing space, planning a budget is an important step in preparing for your office build-out project. Making sure you plan ahead can save you time and headache on your project. Use this handy budget template to start planning your next office build-out project.

Download Your Office Build-Out Budget Template Now

Ultimately, when it comes to budgeting for your office build-out, it’s best to consult a project manager to get exact costs, but these previously mentioned guidelines are a good starting point.

Using Your Tenant Improvement (TI) Allowance to Pay for your Office Build-Out

Your tenant improvement (TI) allowance can be used to pay for parts of your build-out. This usually includes improvements that will increase the value of the building for the landlord. These improvements generally include the previously mentioned hard and soft costs but not vendor costs or furniture, fixtures or equipment.

What Are Typical Tenant Improvement (TI) Allowances in Austin, Texas?

A tenant improvement (TI) allowance is money given from a landlord to a tenant to help pay for the improvements to an office space, or sometimes other expenses associated with moving into a new space. The specific amount of this allowance is negotiated into the lease, along with a detailed outline of what it can be spent on.

In Austin, typical TI allowances vary but usually depend on a few variables outlined below.

Size of Space

The size of your space can affect how much TI you receive. A landlord wants to minimize vacancies and keep a consistent rental income, so larger leases are more favorable for them. Landlords may be willing to offer large TI allowances as an incentive for tenants to sign a longer lease.

Read Next: Six Tenant Improvement Allowance Questions, Answered

Lease Length

Landlords also want tenants to sign longer leases – preventing vacancies. This allows the landlord more time to recoup their initial out of pocket cost for the TI allowance, making a larger allowance more likely.

As a general rule, tenants who sign longer leases are allotted higher TI allowances.

Lease Type

TI allowances vary across different types of leases including a new lease, an expansion, a renewal, or a sublease. Generally, new leases and expansions receive the most TI allowances and renewals and subleases receive substantially less.

These are good guidelines to follow when it comes to estimating TI allowances, but outside factors such as market conditions and other less noticeable variables can also affect the amount you will receive. 

Read the full article here: Cost to Build-Out Office Space: How to Plan and Budget

Chapter 4

How Can You Save Money on Your Office Build-Out?

People frequently ask us for tips and tricks on how to save money during their office build-out. While there are a lot of small ways to save money, these are the top five ways to save money throughout your project.

1. Hire a Project Manager for Your Office Build-Out

As you read these ways to save money, you will notice that hiring a project manager makes each of these money-saving tips much easier and, in some cases, cheaper. So what can a project manager do for you?

Project Managers Give Valuable Pre-construction Advice

Hiring a project manager before your construction even begins can help you make the most informed decisions that lead to a smoother build out with the best end results. Because they are experts on building codes, regulations, vendors and more, you can avoid costly setbacks by speaking with them before something goes wrong.

Project Managers Can Help You Negotiate TIs

Your tenant improvement (TI) allowance can be an important part of your project. As stated in the previous section, a TI allowance is a budget provided by the landlord for tenants to customize a space to their needs. TI allowances typically cover things like construction costs and necessary architectural and engineering fees. These will be specifically outlined in your lease document.  

Project managers have usually worked on numerous build-outs and can provide preliminary project budgets. With these budgets, it will be easier for your broker to negotiate for a TI allowance that matches the size of your project. This will allow you to build out your office space while minimizing what you have to pay out of pocket.

Project Managers Help You Stay Organized and On Schedule

When a project manager plans a build-out they create detailed timelines with set dates for deliverables and milestones throughout the duration of the project, along with assigning responsible parties for each task. These timelines will help you to avoid delays that can potentially cause holdovers – leading to delayed move-in dates. These delays can be expensive and may even cause you to have to move out of your current space before your new space is ready. Keeping a project on time and on budget is one of the most difficult tasks, and a project manager can do this for you.

A project manager’s main objective is to act as the quarterback for you and your project.”

Dustin Hogzett
3 Benefits of Using a Project Manager for Your Renovation or Construction Project

Project Managers Have Market and Budget Expertise

Project managers are very familiar with the market as they have usually worked on a large number of build-outs. They know the market rates for everything you will need for your office build-out and usually have relationships with trusted vendors, this will allow them to help your company maximize value throughout the project. This can mean ensuring that proposed rates for work are competitive with market rates and that the selected vendors and contractors will provide quality work. 

Most likely, everything you want is not going to fit into your budget. But, a project manager can optimize your budget and help you find alternatives to achieve your desired look. To do this, project managers frequently use value engineering, which we will cover in number four below.

2. Start Early, and Have a Plan to Avoid Costly Delays

First, it’s important to start the design and planning aspect of your build-out as early as possible (the design process is described in detail in Chapter 1). Getting these activities started early spreads out your timeline and can decrease the impact of an unexpected delay, reducing the risk of an unforeseen problem derailing the entire build-out process.

Another important thing to plan for and do early is getting permits. As mentioned in Chapter 1, the permitting process can take a lot of time and will cause delays if you don’t plan ahead. 

To avoid issues, you need to choose your team of contractors, specialty trades, consultants, vendors and your project manager very carefully. Choosing the cheapest option or someone you haven’t properly vetted can lead to costly consequences and delays. Usually, a property manager handles the process of hiring the build-out team, so be sure you choose the right project manager if you plan on hiring one.


Office Build Out | Hiring a Project Manger

30 Questions to Ask Before Hiring a Project Manager

We’ve compiled 30 must-ask questions to help make the processes of hiring the right project manager for your office build-out or renovation as easy as possible. Download the free questionnaire today and feel confident that you’ve hired the right team for the job.

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Understanding current market conditions and factors is another important aspect of being prepared for your build-out. The construction economy has changed enormously over the last 10 years, and Austin’s market is at the forefront of these changes. By leveraging up-to-date information and resources, you can avoid surprises and make sure your build-out expenses are in-line with the market.

3. Use Value Engineering

If it seems like your original build-out budget will not be sufficient, you should have a discussion with your project manager to see if value engineering is a viable option.

If you decide to implement value engineering, you will need to sit down with your project manager to go over the original budget. In this meeting, you will decide which aspects of the budget are now unnecessary or were underestimated. After identifying which parts of the budget need to be changed, your project manager will begin working out a plan to implement those changes without causing too much delay to the project.

Your project manager will be able to help you decide which aspects of your project should be scaled back or eliminated and which will still be possible.


St. John Neumann Sanctuary | AQUILA Project Management Case Study

From Design to Budget, How AQUILA Brought This Project Back on Track

View Case Study

4. Consider Leasing Furniture Instead of Buying It

Leasing furniture can be considerably cheaper than buying it. If you don’t have the money in your build-out budget to buy new furniture, you can get high-end furniture by leasing it. Also, if your company’s growth is unpredictable, leasing can be a safer option than buying and ending up with too much furniture. According to office rental furniture company CORT, if you plan to be in a space less than 24 months, it may make more sense to lease. 

Read Now: 5 Reasons to Consider Renting Versus Buying Office Furniture

5. Go Wireless

Did you know you can save thousands of dollars on your office build-out by switching from standard data cabling to a wireless office network?

Read Next: Save Money on Your Office Build-Out by Going Wireless

Companies used to have individual data-cabling for every employee’s landline and their computer. These data connections generally cost around $250 – $400 per employee. This, in addition to the data-cabling you need for conference rooms, workrooms and more, ends up adding up to be around $12,000 – $30,000. 

By switching to cell phones and laptops for employees, you could save a lot of money. You will need to invest in a reliable and powerful wifi plan and provide cell phone reimbursement plans for your employees. You will still need cabling in some areas like conference rooms, the front desk and any other necessary areas, but it will be a much smaller cost.

Read the full article here: 4 Tips to Save Money on Your Office Build-Out

Chapter 5

Should You Hire a Project Manager for Your Office Build-Out?

A project manager can add tremendous value to your office build-out and take a lot of pressure off of you. We highly recommend hiring a project manager for any large build-outs. 

In the previous chapters, we have highlighted the benefits of hiring a project manager. A project manager will:

  • Help you plan before your build-out even begins
  • Help you negotiate a larger TI allowance
  • Save you money on your office build-out
  • Save you time during your office build-out
  • Prevent delays
  • Speed up the permitting process
  • Hire a trusted team for your build-out
  • Use value engineering to make sure you are getting the most bang for your buck
  • Build timelines for your project
  • Help you stay organized

With these resources at hand, you should now be equipped to confidently navigate the complex office build-out process.

If you’d like to learn more about hiring a project manager to help guide you through the process, read our Ultimate Guide to Hiring a Project Manager for Your Office Build-Out.

Or, if you simply have questions about your office build-out that you’d like to discuss, schedule a consultation with one of our qualified project managers today.


Guide to Hiring a Project Manager

Ready to learn more about hiring a project manager for your office build-out?

ut our Ultimate Guide to Hiring a Project Manager for Your Office Build-Out. We give you everything you need to know before you hire a project manager from who they are and what they do to how much it will cost you. Fill out the form for a downloadable PDF version of the guide you can reference later.


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