Rear view series #3: Downsizing your office space liability
Written in 2008:
Downsizing your workforce is often an unfortunate but necessary strategy required to withstand the pressures of a declining economy. As a result of such an action, many organisations are left with large areas of office space that is no longer occupied nor required. These large vacant areas are problematic for two reasons. Firstly, they cost money to run (rent, air conditioning etc), and secondly, have a detrimental effect on the psyche and workflow of the remaining employees.
Clearly, rather than be a fiscal and psychological drain upon the organisation, it is preferable to alter the space to become an income generating asset. If this space will not be required for the remaining lease period, then it would ideally be surrendered back to the building owner. Depending upon the ownership and financial reporting structure of the business, several cost effective disposal options could be available.
Whether the solution is to sub-lease the space or be surrendered altogether, it is essential that the remaining workplace and team remain functional and performing at a high level. During and beyond this transition period, business disruption must be kept to a minimum to ensure continuity of income and profits.
The strategic workplace solution experts at Incorp can advise and resolve the most appropriate long term strategy with you and then implement your objectives. These can include:
1. Lease assessment/options
2. Finance and tax right-off strategy
3. Lease term negotiations and or surrender
4. Workplace diagnostics
5. Strategic accommodation planning
6. Detail design and construction documentation
7. Authority approvals
10. Project manage the delivery of entire process
11. Change management with remaining team
12. Market the sub-lease space
13. Secure tenants.
The corporate property solutions team at Incorp can provide you with the expert advice and assistance to turn your office liability into an income generating asset. The longer you wait, the more money it costs and the opportunity to sub-lease may be lost.
What has changed in 2018?
The pressure remains to reduce the corporate footprint despite buoyant economic times. Organisations are seeking greater flexibility and a variety of settings in several locations. Further, with M&A, legacy portfolios are inherited with some components becoming redundant in new structures. All of these variables result in the need for business to rethink its current property and how to create greater real estate efficiency while maintaining high levels of performance and productivity.
What hasn’t changed is Incorp is still here to help organisations successfully deal with the dynamics of people, property and process. Email the Incorp team now.