MEMORANDUM

FROM:

Jene Zweidinger

TO:

Polina Gertsberg, Chief Executive Officer

DATE:

November 10, 2016

SUBJECT:

Feasibility of Relocating TRU

In our meeting on September 6, 2016, you requested that I organize a recommendation for a new
site for our companys location. It was especially enjoyable during this meeting to review the
trends of TRUs growth since its incorporation. I agree that the future site location for the
company needs to reflect its success to appeal to employees and clientele.
In response to our need to accommodate TRUs progressive expansion, I conducted research on
three sites that would satisfy this need. My search narrowed down to three sites. Table 1: Site
Comparison by Key Features summarizes what each site offers in terms of your requested
criteria of focus.

Site 1
(11717
Grandview)

Site 2
(808 W. Blue
Valley)

Site 3
(1202 Red
Bridge Avenue)

Caf

Distance from
Current Site

YES

NO

12 miles

(ample)

(available
offsite)

Cost

Space

Parking

$19 million, 5
years @ 12%
interest
OR
$22 million, 7
years @ 10%
interest

18,000 sq. ft. of

finished space
+
3,000 sq. ft. of

YES

YES

18 miles

YES

27 miles

unfinished space
=21,000 sq. ft
total

$22 million, 5
years @ 8.75%
interest

21,000 sq. ft.

$15 million, 5
years @ 7.5%
interest

23,000 sq. ft.

(limited)

YES

TABLE 1: SITE COMPARISON BY KEY FEATURES

Based on this information, I recommend Site 1. It best accommodates TRUs impressive spike in
business traffic and employee hires. The following justification takes into consideration your
requested criteria of focus: space, aesthetics, location, and cost. I ranked these criteria in an order
that addresses the most pressing needs of the company.

Space
The need for space is a critical factor, with increases in physical warehouse stock and employee
hires. With overall growth projected at upwards of 150%, the preference for 20,000 square feet is
a key criterion to support these estimates.
Site #1 satisfies this criterion with 21,000 total square feet of building space. 18,000 square feet is
available for immediate usage on the first three floors, and accounts for close to 90% of the
projected growth in both warehouse stock and employee hires. An additional 3,000 square feet is
unfinished on the fourth floor.

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The bottom three floors would provide for current employees and house a significant portion of
projected new hires. The fourth floor is a bonus. It does not need to be finished immediately, and
can serve as space for miscellaneous storage needs. It also has potential for customization, and
can be renovated for additional offices, employee lounge space, and/or a cafeteria. Waiting to
expand will best fit the immediate budget, and future funds from business growth can financially
provide for renovations in the future.
The main drawback of Site 1 is that it does not presently include an on-site cafeteria. However,
the building next door to it has accessible food services.
Site 2 and Site 3 also fulfill the requested space specification. However, Site 2s building space
leaves very little room for parking. Many employees would need to walk to and from remote
parking lots. Site 3 best fulfills the space requirement of the three buildings, but has many other
drawbacks, especially in regard to aesthetics and distance (explained below), that eliminate it as
the frontrunner.

Aesthetics
Site 1 is located in woodland with hiking trails and picnic areas available for company access.
This scenery will also enhance the interior workspace by providing an aesthetically pleasing view.
Not only does the woodland provide a visually pleasing effect, but the hiking trails and the picnic
areas allow employees to interact with their surroundings and stimulate their minds to boost
productivity. The locations immediate aesthetic appeal is seen in Figure 1: Front of Site 1, a
picture of the front entrance side of Site 1. Figure 1: Front of Site 1 also shows the adjacent
building with accessible food services to the left of the main building. Figure 2: Hiking Trail of
Site #1 shows a section of the hiking trails that are available on site.

FIGURE 1: FRONT OF SITE 1

FIGURE 2: HIKING TRAIL OF SITE 1
Site 2s
and Site
3s aesthetics do not have comparable appeal to Site 1. A cornfield to the East, a highway to the
West, and a lake to the North border Site 2. The cornfield and lake provide some visual appeal,
but since the building is so close to a highway and flocks of geese occupy the lake, Site 2 poses
some concerns for noise and smell. Site 2 is shown in Figure 3: Front of Site 2 on the following
page. Site 3 has no aesthetic appeal. It is located in a heavily industrialized area. Site 3 is shown
in Figure 4: Front of Sight 3 on the following page.

As

FIGURE 3: FRONT OF SITE 2

further

FIGURE 4: FRONT OF SITE 3

demonstrated in the above figures, Site 1 far exceeds Site 2 and Site 3 in terms of aesthetic appeal
with its natural, quiet setting. This bolsters its stake as the strongest candidate for relocation out
of the three sites.

Location
TRUs employees are satisfied with their current commute to TRUs present location. By moving
within a reasonable distance from the current location, employee satisfaction should remain
consistent, especially with the benefits offered from the new location.
Site 1 satisfies the need to keep a close proximity to the original location, as TRU should relocate
no more than 20 miles from the current location. Site 1 is only 12 miles away. TRU will be able
to retain and continually expand upon its success, both through employee satisfaction and
patterns of product delivery.
Site 2 is located 18 miles away and Site 3 is located 27 miles away from the current site of
operation. Both sites distances exceed the preferred proximity from the current site. Site 1, as it
is within the preferred distance, has an advantage over the other two sites in this category. Table
2: Comparison of
Site 2
Site 3
Maximum
Site 1
Sites by Distance
(1202 Red Bridge
(808 W. Blue
(11717 Grandview)
Distance
shows the direct
Avenue)
Valley)
comparison of this
criteria
between
15 miles
12 miles
18 miles
27 miles
the three sites.

Cost

TABLE 2: COMPARISON OF SITES BY

All three sites are within a reasonable range of the preferred budget of $20 million at 10%
interest. The price for Site 1, without renovations, is $l million under budget, and is only 2% over
the preferred interest rate over 5 years. The price, with renovation of the top floor, is $2 million
over budget at 10% interest over 7 years. Both options are justifiable, and any amount over
budget is compensated for by the other qualities of the property, such as space, location, and
aesthetic appeal.

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Site 2 is $2 million over budget, but its features do not justify the price like Site 1. Site 3 is the
cheapest option at $5 million under budget, but its location in a heavily industrialized area does
not satisfy the other criterion for aesthetics and locations for TRUs relocation.

Expected Results
Based on the criteria above, it is my recommendation that TRU relocate to Site 1 at 11717
Grandview. Its current condition satisfies the most pressing, physical requirements of the
companys expansion. Future growth of the company and subsequent sales will provide for the
renovation of the top floor should we choose to do so.
Furthermore, TRUs progressive, eclectic work environment benefits by immersing the employee
population in an aesthetically pleasing environment, with space available on site to expand and
refurbish for any use deemed necessary, such as a caf space, additional offices, or storage. Most
employees should be satisfied with its distance from the old location, and any employee whose
commute may be extended because of it should find that the benefits of the new site would
outweigh the disadvantages.
The location and proximity to the old building will not disrupt our clients satisfaction. It is
located 12 miles away from the old site, and therefore will allow TRU to maintain its current
convenience of location for ease of transportation. Customer satisfaction with delivery should
remain consistent.
All of these factors justify Site 1s price at either its current condition or with the renovation. The
maximum cost for this location is $2 million over budget at our preferred 10% interest rate over 7
years.
I hope this information was helpful in your decision making process. I look forward to meeting
with you to discuss a plan of action going forward.