Should You Renovate or Relocate?

Is your business outgrowing the space it occupies? If so, it may be time to ponder whether it's time for a new work environment.

This change may take a few different forms. One option is to refresh and expand your existing location to accommodate current and future needs. Or, you could take the plunge and move to a brand new space.

Whether you're a business owner or a member of a leadership team, addressing this question is both a blessing and a curse. It likely means your business is doing well, but it also points to potential upheaval and disruption—which is in the nature of both renovation and relocation.

When you find yourself in this position, here are a few things to consider when evaluating the pros and cons of both options.

Understand What You're Getting Into

If you are exploring a possible renovation, you need to do your homework. Get familiar with applicable building codes, historical preservation requirements, the age and infrastructure of your building, as well as expectations of your landlord if you don't own the building.

Trends including open layouts, in-office cafés, and other innovative design upgrades may seem attractive, but ensure they fit within your parameters—both code- and budget-wise—before devoting time and resources.

Do the comparison legwork. Evaluate costs to renovate against a projected cost of relocation. Take different scenarios into account and make a value judgment that balances budgetary concerns, future growth projections, and employee productivity.

The same research-based approach applies to finding new space. In that case, you can rely on advice from an experienced commercial real estate broker, but there's no replacement for your own due diligence regardless of your choice.

How Much Disruption Is Too Much?

Renovation may be the correct path to take, but be prepared for disruption to your day-to-day operations. If you and your team decide to refresh your existing space, be aware that the period of disruption is likely to last longer than if you were to relocate.

Construction, equipment, noise, milling workers, and inevitable timeline delays could significantly disrupt operations and worker morale. What's more, health and safety issues could arise if not addressed properly by your team or the construction company. You'll need to weigh the pros and cons of long-term benefits versus short-term discomfort and potential employee unhappiness.

Keep in mind that an occupied space takes more time to renovate than one that is vacant, as an empty office enables the contractor to tackle multiple tasks at once. Occupied remodels require a staged approach so that operations are not completely disrupted during the process. While relocation also comes with complications, a small business move typically causes inconvenience for perhaps a weekend or two, whereas renovation can take months.

Involve Employees in the Process

Involving employees early in the process builds ownership and excitement. Unless major commute changes are at play, getting employees on-board with a move will require less efforts as they will often be able to envision the future plan and get excited about it.

Conversely, employees about to endure a renovation may have a more difficult time getting past present inconveniences, so it's wise to form an employee task force. Communication with team leaders helps keep everyone informed and limits surprises. Share renderings and updates often to keep the vision top-of-mind.

Even if your business is not typically open to remote working, now may be a good time to allow for some flexibility. Offer your employees the option to work from home during especially disruptive stages to keep productivity and morale high. Including and accommodating your employees is critical to keep them excited.

A New Space is a Fresh Start

While not feasible for every organization, the advantages of relocation are plentiful. A move will reinvigorate your employees, provide an opportunity for refreshing your brand, and furnish your business with public relations and marketing opportunities.

Finding an ideal new office has its complications and risks as well. For example, you'll need to negotiate a new lease, nurture a relationship with a new landlord, and perhaps saddle-up to a higher rent for a newer, nicer space. Overall, the decision to move or renovate should be a collaborative one among all stakeholders in your business.

About the Author: Rocky Mackintosh
Rocky Mackintosh has been a real estate market leader since 1972. In 1980, he founded Mackintosh, Inc. Realtors, a multi-office general brokerage firm. In 1990, he established MacRo, Ltd., the Frederick, Maryland-based land and commercial real estate development, real estate brokerage, leasing, property management, and real estate consulting services firm he heads today.