Return to the Office

Getting back to the office is the talk of the business world these days, as company leaders and employees consider their plans for returning to a semi-normal state of work. It’s the moment many of us have been waiting for, a signal that the COVID-19 pandemic has loosened its grip on our daily lives after more than a year of working from home for most office workers.

But going back to the office isn’t as simple as it sounds. The notion of returning is vastly more complicated than just telling employees to be at their desks at 9 a.m. Monday morning.

First, company leaders need to determine if and how they want to bring their staffs back to the office. Some employees, particularly those who do more individual tasks or have introverted personalities, have thrived while working from home, while others miss the camaraderie and collaboration of the office. Managers have noted how much more difficult it is to keep track of their teams while working remotely, while people of all ranks can agree that the flexibility brought by remote work smooths out other parts of life.

That’s why so many businesses are thinking about hybrid work, which combines remote and in-office work, to allow employees to experience the best of both worlds. Hybrid work is a growing trend for a reason; it makes a lot of sense for some companies, but it also necessitates investment, strategy and careful coordination. It’s the kind of thing that should be closely inspected and discussed with experienced professionals.

The same goes for transitioning to co-working, another option some companies are considering as they anticipate changes in their workforce or office strategy in the coming months and want flexibility to change directions quickly.

And while some companies will be able to go back to their pre-COVID offices, others will need to move to a new space to accommodate changes or will want to seek to capitalize on a market that is more tenant-friendly than we’ve seen in metro Denver in some time.

Once your company has decided on a plan, there are safety measures to consider. Company leaders are responsible for keeping employees healthy, safe and comfortable at work and will need to put serious thought into how to achieve this goal, whether it means encouraging social distancing, improving air filtration or ensuring that surfaces are routinely sanitized.

We at Tributary know this is a confusing time with a lot of unanswered questions, but we’re here to help you find answers, beginning with our Return to Office hub, a handy online guide with all the resources business leaders need to get started.

View our Back to the Office Resource Hub here.

Return to the Office2021-06-25T18:58:47+00:00

Tenant Improvement: Construction Considerations

People are headed back to their offices across metro Denver as the effects of the COVID-19 pandemic wane, with many companies re-engineering their strategies around office usage to accommodate changes in employee preferences and business realities.

These changes often necessitate tenant improvements to a new or existing office space, which is an exciting opportunity for business leaders to infuse culture and flow, but in today’s environment can be extra challenging, requiring additional consideration and expert navigation.

Even before COVID-19 sent global commodities markets into a tailspin, construction materials costs were on the rise, thanks to surging demand during a decade-long construction boom in most major U.S. cities, including Denver. The strain on supply chains caused by COVID-19 only exacerbated this problem. Coupled with uneven demand for construction materials that has left some producers unsure about how to manage production levels, many common materials are difficult to come by, or just plain expensive.

Lumber prices, for example, spiked in early May to more than $1,600 per 1,000 board feet before coming back down to $1,285 in the beginning of June, a number still well above the pre-pandemic price of $540. Similarly, paint, millwork and copper wire have shot up in price. Steel costs 60% more than it did a year ago.

Labor shortages remain persistent in construction, particularly for skilled tradespeople, which can often slow timelines and drive up prices as contractors try to lure employees away from competitors. Increased demand for subcontractors has also resulted in short bid hold periods, which further complicates financial forecasting.

On top of all of that, permitting has become increasingly more difficult than it was before the pandemic. Fifteen months of remote work for municipal workers using systems made for in-person permitting created a backlog, and many of these workers are still remote. A pandemic-related surge in homeowners applying for permits to complete small renovations to their properties added to the workload of these systems.

As a result, permitting is taking longer than expected, especially in popular, growing cities like Denver, with some reports of wait times locally stretching as long as 18 weeks. This, in turn, impacts construction schedules and budgets.

a construction site with bulldozer

So, what does all of this mean for companies seeking to complete a tenant improvement project?

Be aware and do your research. While it may be trickier to complete this kind of project than it was 18 months ago, it’s certainly not impossible. With the right assistance and advice, tenants of all stripes can complete a tenant improvement project that makes room for the recalibration of office usage in the post-COVID world.

Tenants should work with experienced, well-connected brokers to negotiate with landlords for higher improvement allowances that will help offset the increased costs of labor and materials and ensure that the process is started far enough in advance. Market dynamics shifted during the pandemic, giving tenants more leverage to make requests like these.

It’s also critical for tenants to make sure they are casting a wide net when working with general contractors, architects and other project partners who are part of the tenant improvement process. By making sure there’s plenty of competition for their business, tenants can find better prices or generally be more selective so they’re getting what they want for their money.

At the same time, business leaders should be prepared to make timely decisions. Prices are expected to continue rising for the foreseeable future, so delaying a construction decision can mean spending thousands more than expected.

With help from an experienced team like ours at Tributary, any company can successfully execute a tenant improvement project to get teams back to work in the most efficient and thoughtful way possible, even in the current challenging climate.

Tenant Improvement: Construction Considerations2021-06-12T15:36:04+00:00
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