This second interview with Scott Boldt, President and CFO of CrossFields, Inc. is designed to answer the questions we hear from many chiropractors when planning the budget for the build out of their office space. For more answers, read our first blog in this series.
How much does it cost to get a floor plan made?
The first phase of designing a space is called Schematic Design. The cost can be free to the potential lessee as a lost leader cost to the lessor, or up to $5000 for extensive interviewing and option consideration process to get to the final, most ideal plan for a larger, free-standing building.
How much do the drawings to get a permit cost?
One, the drawings required by the governing municipality will dictate the number of details and amount of information required to secure a permit. Also, the level of details and finishes, the amount of variations to the plan, and design and condition of space to begin with (remodels typically take more drawings and time than a vanilla/white box.) Also, a set of permit drawings do not need interior details, while a full set of construction drawings do. For spaces under 5000 square feet, we have seen construction drawings from $1,000 to $50,000.
There is not a percentage used in Chiropractic offices. The budget you need highly depends on quality and style of product you are considering. We have had several clients order IKEA furniture with the understanding they could furnish the whole office for a relatively low cost with the intention it would be replaced in two to three years.
If quality and longevity are important, we suggest you use commercial furniture. The fabrics used in commercial furniture are made to prevent stains and signs of wear, and you have many, many different options. Commercial furniture can take up to 12 weeks to receive, so you must plan ahead. Lobby chairs can vary from $500 to $3000 each. Yes, there is that much of a difference depending on style.
How much do I have to pay an inspector once my office is built?
Ultimately, you should not owe any fees. The exception to this is the Fire Inspector. Once they have signed off and you obtain a C.O. (Certificate of Occupancy,) you could often have a minimal fee of $50 for his service. The one exception to this rule that should be noted is if you have not met the approvals needed by Inspectors and they have to return multiple times for additional inspections, there will be additional charges.
This amount of money varies dramatically from zero dollars to several thousand dollars that can pay for 90% or more of your build. It is largely dependent on the space being renovated. Is there need to build out the space for the first time or does the space only need refreshing? Is the landlord looking for your type of business to round out the business types they are looking for in their development? How aggressively is the landlord trying to fill the development? This is especially prevalent during tougher economic times.
For more details about Tenant Improvement Allowance, read our blog article about it.
What changes have you seen over the last year as far as the market?
The good news for our industry is that we have seen construction activity pick up dramatically, especially in the Southeast. In Atlanta specifically, I would use the term “pent up demand.” This creates a favorable market. The market is not completely recovered, but the banks are now actively lending and for the most part, money is getting easier to obtain. This is good for obtaining loans.
But the not-so-good news for you is this increase in demand with less available supply of workers and materials has dramatically increased construction costs and lead times.