Office N Illinois

Construction costs rise as companies compete for enviable office build-outs

Construction costs rise as companies compete with enviable office build-out,ph01

Out of major metro areas, Chicago has the fifth highest construction costs, according to a report from JLL. National trends such as rising costs for materials and pockets of labor shortages only add zeros to the bottom line. But for companies battling it out to attract the best employees, rising construction costs are worth it when you end up with an impressive, enviable workspace.

Chris Novak, senior vice president at Leopardo, said a lot has changed in construction since he joined the firm nearly 27 years ago. Novak leads Leopardo's commercial interiors group and mainly works in the downtown office markets. He's worked on offices for Grant Thornton, Zebra Technologies, Twitter, Grub Hub and Amazon.

While the tech industry is quick to jump on trends like open floor plans and exposed ceilings—more traditional companies are eager to renovate their offices as well. Despite what most people think, subtracting walls doesn't mean the build out will be any cheaper. The client could save a few dollars on drywall, studs and doors but money is shifted into other areas, said Novak. For example, with an open ceiling, all the infrastructure, conduit and wires can't be thrown up haphazardly. They need to be run neatly parallel and that takes extra planning and work.

Another area where cost has increased are a building's security systems. That includes everything from monitoring systems to automatic turnstiles or gates and smart elevator systems. Lighting has changed too, clients are interested in dimmers and want more versatility than just one overhead light source. Lobbies and building amenities such as private rooftops or fitness centers are really important as well.

Novak's also noticed that many buildings are adding conference centers that take up an entire floor and can be reserved by the building's tenants. By not having conference rooms in each office it allows tenants more space and flexibility. All these updates and modernizations help get potential tenants through the door.

"It's similar to if you were going to buy a house—you're not going to look at homes that still have shag carpeting and wallpaper from 1980s," said Novak.

While the offices that Novak builds out likely don't have shag carpet or wallpaper, there is a lot of pressure to have the latest tech and design trends in your office. That added pressure has caused construction timelines and schedules to keep on shrinking. A project that would have normally taken 6 months, now has to get done in 3 months. The expedited timelines can be challenging, especially when a client comes to Novak with highly conceptualized project.

"Sometimes you'll get a drawing with lines and scribbled notes and go, what does this even mean," said Novak. "There are great visions but we really have to work in order to make it practical and real. The last thing you want to do is put a damper on the designer's vision."

Novak makes sure everyone on his team from superintendents to subcontractors are involved very early on. That means asking a ton of questions and having discussions with the designers to make sure everyone understands what's trying to be accomplished.

There's more driving custom office buildouts than just companies trying to snag the best workforce, Novak said. Having a space that feels inviting, warm and inspiring when you walk in shapes how you feel during the day. It also makes employees feel taken care of and that your work is worthy of the investment.

"So much of our lives are spent in the office and if they're design is blah, then you feel that, that's your attitude. So we really try to do the best work we can," said Novak.