The Perfect Blueprint for Planning 2024 Office Decommissioning
The last few years have brought new challenges to the management of corporate real estate and workplace facilities. Facilities managers now face a significantly more complex task, encompassing cost-effective adjustments to leased facilities to align with evolving remote and hybrid work protocols. The responsibilities extend to the sustainable liquidation of furniture assets that are no longer necessary. Despite some enduring fundamentals, the essential work of facilities managers has become more intricate.
With decades of experience in the business of decommissioning and liquidating office furniture for some of the largest corporate lease holders in the US, we have seen the industry evolve even if the same old priorities apply.
As you plan for the coming year, we thought we would share some pragmatic perspectives we have learned through our experiences executing successfully against real estate challenges.
For our last three blog posts of the year, we will share a formula to help you successfully deliver sustainable, on-time, and on-budget, office furniture management projects in 2024!
First up:
Plan to be downsizing…your space and your furniture inventory
In a recent webinar hosted by the Counselors of Real Estate (cre.org) our CEO Brian Silverberg shared an observation that was corroborated by noted real estate broker and consultant co-presenter Ruth Colp-Haber: The vast majority of tenants in major commercial real estate centers, who are vacating leases as they come due, are moving to smaller leased spaces.
To share another point of view, global commercial real estate advisory firm, Cresa, published a report on the 2024 market expectations specifically in the San Francisco market that looked at trends impacting the demand for space and the growing reality of downsizing.
“We looked at 137 market requirements (i.e. Tenants in the Market or TIM's) reflecting 3.88 million square feet of demand. The takeaway is that this sample set is in the market for only 3.04 million square feet or a 21.7 percent decrease….
Tenants over 100K SF plan to contract by an average of 27.4%
Tenants between 50K and 100K SF plan to contract by an average of 46.6%
Tenants between 25K and 50K SF plan to contract by an average of 42.7%”
While this report focuses on the San Francisco market and acknowledges that not every industry is downsizing, it is a proxy for the realities impacting many or most commercial centers across the US.
The consequence is clear: If you are downsizing leased space for new workplaces, by definition you are downsizing the furniture assets you need to occupy the new space or at a minimum, re-designing your furniture asset needs. And once you do the total calculation, you will have assets to liquidate selectively and responsibly as you decommission the space you vacate.
The furniture you reallocate to the newly leased space will need to be reconfigured and likely refurbished. When you don’t have existing furniture appropriate for the new offices, you will need to acquire new items appropriate to the revised smaller square footage configuration.
And new doesn’t need to be bought new . . . in fact, a sustainable alternative to “white boxing” (the default of buying new) is not only possible but cost effective. The prerequisite is that you must plan and inventory, evaluate, decommission, refurbish and re allocate your own furniture assets, and extend their useful life. And then fill in the needed additional items with remanufactured furniture consistent with your corporate design standards.
This is the underlying principle guiding what has become known as the “circular economy”. Simply put, it involves the mindset of re-using and repurposing goods and materials in any industry in order to achieve an economically viable, zero-waste, sustainable world of work.
So, the operable word in this first blog post in our series is sustainable planning, hopefully with partners who understand all facets of the furniture management process. To effectively plan, you'll need to assess both the quantity and condition of the furniture inventory in the office space you're vacating. Consider the timeline between vacating and moving into the new space and decide on the liquidation of furniture you no longer need. Additionally, plan for the refurbishment of furniture that can be reallocated. Factor in space planning and design configuration, ensuring a smooth move-in and assembly process, all to be completed by the day you lay down the welcome mat for your returning staff.
With all the details you must oversee, aligning with the right partner to oversee and coordinate many of these intricacies significantly enhances the likelihood of success.
As you embark on your plans for 2024, we are eager to collaborate with you throughout the entire planning and execution stages of your project. Feel free to reach out to us at inquiry@tfxfurniture.com to initiate the partnership.