One day we noticed we were running out of space in our current building. We also decided that, as a software company, we should try to buy a building so that we would have something to borrow against if times were ever bad. Right now, times are really good. So now's the time to prepare for the future.
So we find our dream building. Brand new. Just built. Great location. Ponds and nature stuff all around. Near the highway but not right on it.
And we got it for a decent price. Not a great deal. But not a bad deal wither. But like I said, it was just a shell. For the "build out" we wanted to have a decent interior. Nothing that fancy but better than what we have in our current building which can be charitably called "construction grade".
And so we negotiated a $25 per square foot build-out price. That would include the drywall and kitchen area we're having in power outlets, and ceiling tiles and lights,and all the other stuff that takes you from an empty shell to something you can move your office into.
For $8 per square foot, we contracted out the actual carpeting and wallpaper (we're wallpapering the interior). Since we did this, our builder was supposed to credit us the amount he was going to charge us. And he did credit us $2 per square foot which to us seems ridiculously little but fine, whatever.
Now, from what we heard, $25 per square foot for an office build out is supposed to be a decent build out budget. Not that fancy mind you but a definite step up from "construction grade" finishing. But apparently it isn't which is where our problems come in.
We had an extra bathroom put in. And we had our ceiling tiles upgraded to acoustical to help keep sound from traveling too much. We also asked for some insulation to be put in-between walls to keep sound down. And our kitchen has a few more drawers and such in it. And our lobby area has some granite tiling.
Our understanding was that construction grade build-outs are about $15 per square foot. So at $25 per square foot, we had some room to expect something reasonable.
But in actuality, the changes I described added $7 per square foot! Which to us is far more than we had expected. And $7 per square foot on the space we're talking is tens of thousands of dollars difference.
So our $25 per square foot build out has become $25 + $8 + $5 ($7 - $2) for a total of $38 per square foot. Now I don't claim to be some expert but a $38 per square foot build out should be pretty incredible. Maybe my expectations are just off but the bottom line is that our budget is just out of control. The net result would be a building that will have cost $175 per square foot.
On top of that, we have $110,000 in new furniture costs. Probably another $25,000 in window blinds (yes, ironic). Another $15,000 for the phone system. $10,000 for "low voltage". $10,000 for the security system. $10,000 for a generator (not sure we're going to do this now or not).
In terms of cash down, we're talking some serious bucks. Which is why the build out cost-overrun is the straw that's breaking the camel's back. I feel like we're being eaten alive by a thousand little contractors. But the additional $7 per square foot build out is the straw that's breaking the camel's back. I'd be willing to go as high as $3 to $4 extra for the extras we've asked but not $7. Which even then I'm feeling like a total chump.
Does anyone know where I can find some more information on how much build-outs on new commercial consruction should be? I just can't believe that a medium-quality build out should cost $38 per square foot.
