How much will it cost to move my firm? The costs associated with a commercial relocation project

Corporate moves take place for a variety reasons, but some are more practical than others. The reasons can be as important as expansion, downsizing, lease termination, merger and acquisition or as superficial as the fact that the new CEO lives in Connecticut, Florida or anywhere else. When a company's executives are considering relocation, the task of developing a budget estimate typically falls on the facilities manager and the consultants he or she works with. Although this is a difficult undertaking, there are strategies that can be used to develop a realistic budget. Every budget is site-specific and not easily determined. As an example, the budgets I created for a project for the Fulton Fish Market, from Manhattan to the Bronx, had a completely different set of criteria than those I worked on for a corporate move from Wall Street to the World Financial Center. The more accurately planned the project is, the fewer the unforeseen to drive costs up. In many cases the project changes midway through, and the budget suffers. For example, the planning of a major move at Madison Square Garden for the Republican National Convention changed daily for two months. The project being completed for the Republican National Convention disrupted regular activities at the site, and special contingency plans had to be made. The primary budget included moving the lower ground stands and the basketball court. The final one included the addition of moving the hockey ring, the Liberty court, the Felt Forum, the sound equipment, 2,000 chairs, podiums, lighting and a cage left by a circus. In most such cases, the major budget mistake is poor prior planning and not beginning the planning phase early enough in the time frame. Plan the budget early; planning a move, particularly a major move, should start twelve months before the move date. Relocation costs can be simplified into two categories: the cost of the actual physical move and the many supplemental costs. Supplemental costs include the cost of the new lease, new furniture/installation, storage, new phone systems, IT system upgrades, security, etc. These are expenses not immediately taken into account during pre-move budget planning, and when not included, will wreak havoc on a budget later on. These costs sometime rack up a greater expense than the physical move and are issues that must be supervised by a professional relocation consultant or a project manager. Calculating the cost of the actual physical move is much simpler. Pricing is charged per square foot, and additional services are typically priced up front. A moving industry quote for a traditional project that consists of relocating a full assortment of office furniture and contents from one high-rise office to another in New York City is typically $1 to $3.50 per s/f. However, most projects are not easy and they are never "simple." Corporations today are more dynamic and have diverse needs. As projects become more complex, this base quote will rise. It is imperative that responsible parties work with a space planner to determine what FF&E (furniture, fixtures and equipment) will need to be moved. Create an inventory of all items. Choose only items that are essential to the office. Purge unnecessary materials and equipment, and send unneeded files and items to storage. Donating or recycling old furniture can be a cost savings and in some instances can help defray part of the cost of a move. Donating unneeded equipment ensures that the company is not paying to move these items that will eventually be discarded anyway. Company downtime is a very important consideration. Although it does not have an immediate effect on a budget for the project, minimizing downtime is key to the company's ongoing operations. Plan to allow at least 3 to 4 hours of downtime on the afternoon of the move and 3 to 4 hours on the first day in the new space. Communicating with the employees and good planning will make this possible and will keep the negative impact of the move to a minimum. Communicating with employees on a weekly basis throughout the entire process is critical. This can be done effectively with a newsletter or e-mail bulletin that will keep them informed and allow their questions to be answered. However, it is also helpful to have a mechanism where specific questions can be addressed. The cost of the actual move is easily determined, but it can be seen that hidden costs can be the most damaging to the budget. With early planning and a review of the move as well as related costs, a budget can be maintained and additional costs can be kept to a minimum. James Barnes is a relocation industry expert with FITCO, part of the Advance Group, New York, N.Y.