The Multi-Million Dollar Drain: How Inflexible Office Spaces Become Financial Sinkholes
By Robert Kroon
Executive Summary
Static commercial office buildings are plagued by a hidden, multi-million-dollar financial drain: stranded electrical assets. The mean occupancy for a typical commercial office tenant in the US hovers around 3 to 5 years, with some tech leases being even shorter.
Each time a tenant turns over, the existing, hard-wired electrical and data infrastructure becomes a "sunk cost," often useless to the next occupant. Tearing out and replacing this stranded electrical system—part of a full renovation that can cost $100 to $200+ per square foot—is a massive, repetitive expense.
By contrast, technologies such as fault-managed power (FMP) and battery-powered Agile Furniture bypass this demolition and re-wiring roadblock, making reconfigurations as simple as moving furniture. This shift converts a multi-million-dollar liability into an Agile Workplace asset, saving building owners and tenants millions over the building’s life cycle by eliminating costly and disruptive overhauls.
📉 The Cost of Tenant Turnover: Your Electrical System is a Liability
For commercial real estate building owners, architects, and facility managers, the true cost of a traditional, static office building is exposed every time a tenant leaves. The mean lease term for many commercial tenants in the US is short, frequently around 3 to 5 years. With each turnover, the expensive, hard-wired electrical and data systems installed for the previous tenant are often rendered useless for the new occupant. This creates stranded assets—infrastructure that was a massive investment but is now a worthless sunk cost.
The financial consequence is stark: the next tenant or the building owner must incur an additional cost to tear out and replace these expensive, hard-wired systems. This is part of the overall, highly disruptive process of a full renovation, which can range from $100 to $200+ per square foot. Since commercial electrical costs can average $11.50 to $20.00 per square foot, the cost of constant electrical demolition and reconstruction across a large commercial portfolio represents a staggering, recurring financial loss. A building not designed for change is, simply put, a financial sinkhole.
Retrofitting an older building can necessitate extensive structural modifications and involve costly labor.
💰 The Agile Workplace Advantage: Financial Freedom
The only way to escape this multi-million-dollar cycle of demolition and reconstruction is through infrastructure flexibility. This is where technologies such as fault-managed power (FMP) and battery-powered Agile Furniture—like our Respond!, Juce, CampFire, and Wallies solutions—provide a dramatic financial advantage.
Eliminate Costly Reconfigurations: The biggest "gotcha" for a static workplace is the expense of change, involving multiple trades—demolition, carpentry, electrical, and data cabling—every time the space needs to be reconfigured. By deploying technologies such as fault-managed power (FMP) and battery-powered Agile Furniture, you bypass the need for an electrician in reconfigurations. Layout changes become as simple as rearranging furniture.
Future-Proof Your Assets: Instead of creating sunk costs, you create a building where the power infrastructure is reusable and adaptable to any future tenant. This preserves the value of your commercial real estate and makes your space dramatically more appealing to modern tenants who demand agility.
Tenant-Friendly Benefits: Tenants gain access to a truly flexible layout that supports hybrid and diverse work styles, from quiet focus zones to collaborative areas. This adaptability is directly linked to reduced employee turnover (the cost of replacing a single employee can be tens of thousands of dollars) and a decrease in the cost of unscheduled absences, which are a major drain on company finances.
For architects and commercial interior designers, specifying solutions like our Respond! mobile desks, Juce monitor stands, CampFire collaboration tables, and Wallies mobile room dividers means delivering a solution that converts a huge recurring expense into long-term savings. You are no longer designing a static space; you are designing a profitable, adaptable asset.
August Berres products, like this Respond! desk, integrate battery power into the design, avoiding AC connections.
About the author:
Bob Kroon is a recognized thought leader and innovator with over four decades of experience in the electro-mechanical and furniture industries. As the CEO and founder of August Berres, he envisions overcoming the limitations of traditional building power by enabling the Agile Workplace through a smart power ecosystem.
Bob passionately advocates for technologies such as building microgrids, fault-managed power (FMP), and battery-powered Agile Furniture, which are transforming the design and utilization of commercial spaces. Under his leadership, a suite of innovative solutions has been brought to market, including Respond!, Juce, CampFire, and Wallies. These products empower building owners, architects, and facility managers to retrofit buildings for today’s dynamic work environment.
