October 18th, 2017

To: David Wallace, CEO

From: Micheal Scott, Regional Manager
Subject: Pittsburg Branch Expansion

Introduction
Alexandra Celender

This progress report is in reference to the ongoing project to open a Dunder Mifflin,
Pittsburgh location. Dunder Mifflin has initiated plans to open a branch in the Pittsburgh,
Pennsylvania area because of its prime location between our Scranton and Akron branches.
Pittsburgh is a city that not only has a thriving economy that could help boost sales and
strengthen relationships with our largest clients, but its geographic location in between our
current branches would allow us to more easily facilitate transporting paper products throughout
the region. This progress report will detail the goals we have set in order to open a new
Pittsburgh branch location, and lay out the work already done to proceed, as well as the work
that must be done.
We will first discuss how the process of location scouting has come, and look into a cost
analysis of two locations weve narrowed the search to, as well as the work remaining to apply
for a lease. We will next identify the businesses located within the area of both locations, and
how placing a Dunder Mifflin branch there will impact the area. Finally, we will look into how
we will be furnishing our new location and analyze the cost to do so.

Summary of Progress
Cameron Blount

Dunder Mifflin is currently entertaining all possibilities with decided on a new location to
further business. The top two contenders for the new location offer different benefits for the
company. We are currently deciding on which location will better fit our company. Both
locations that we are interested in are both located in Pittsburgh Pennsylvania. Pittsburgh is the
second largest city in Pennsylvania and the U.S. rated Pittsburgh a 6.5 overall. The metro
population is approximately 2.4 million people. Each location has its benefits but the overall
decision is which location benefits the company the most.
Goal 1: Identifying a Location
Alexandra Celender
Work Completed
To begin the search for an office for Dunder Mifflin, Pittsburgh, we identified the areas
that would best suit our needs. We decided that areas off of interstates leading to Akron and
Scranton were the best options as they would allow for easy transportation of paper to and from
our other regional branches. We also found that the Pittsburgh branch will not need as large of a
warehouse space as our other locations, and will mainly work in sales and transporting within the
region. Because of this, we decided that an office space anywhere from 3,000 to 5,000 square
feet will be adequate.
We then enlisted two of our corporate facility management agents to compile a list of
available properties in the Pittsburgh area. Following the compiled list, we sent our facility
management agents to scout locations over the course of 4 weeks while working with our branch
relations representative to identify those locations that will suit our future employees. The
facility management agents also worked to create a comprehensive cost analysis on the
individual properties that they found and have attached this below.
Our representatives scouted many locations within the Pittsburgh area and were able to
narrow it down to two prime locations:
1. Location One: 230-246 Alpha Dr Pittsburgh, PA 15238 Commented [1]: http://www.loopnet.com/Listing/230-
246-Alpha-Dr-Pittsburgh-PA/3926947/
Commented [2]: I'm leaving the links for both listings
in the comments in case anyone needs to look before
turning it in

a. This lease includes the entire first floor of a two-story office building located in
the Fox Chapel area, off the edge of the Allegheny River and near the Allegheny
Valley Expressway
b. The office is 4,643 square feet, includes 8 private offices, a large kitchen/break
area, a conference room, and an open floor plan suitable for installing cubicles
c. Located at the entrance of RIDC Industrial Park with direct access to the PA
Turnpike and Downtown Pittsburgh
 d. Direct access to downtown area and turnpike/interstate make this location ideal
for making sales calls as well as importing and exporting paper products within
the Akron, Pittsburgh, and Scranton region
e. 2 hours from the Akron, OH branch
f. Almost 5 hours from the Scranton, PA branch
g. $17.50 per square foot a year, utilities not included
h. Includes a 3 to 5 year lease

2. Location Two: 201 S Highland Ave, Pittsburgh PA 15206 Commented [3]: http://www.loopnet.com/Listing/201-
S-Highland-Ave-Pittsburgh-PA/4871184/

a. This lease includes the entire first floor of an office building located in the
Shadyside business district
b. It is 3,650 square feet and includes a spacious office open floor plan suitable for
installing cubicles
c. Good location for making sales calls as it lies within the business district,
however it would not be the best option for importing and exporting paper
products
d. Slightly over 2 hours from the Akron, OH branch
e. Around 5 hours from the Scranton, PA branch
f. $22.00 per square foot a year, with utilities included
g. Full service lease with parking
h. Includes a 3 year lease

Work Remaining
To complete the location leasing process we expect a full two to four week period to
successfully lease the chosen space. This process will involve our Vice President of Northeastern
Sales, Jan Levinson, who is the current corporate official overseeing hiring the new Pittsburgh
regional branch manager, as well as the new branch manager and our two facility management
agents to meet and tour both locations. They will discuss the material covered in this progress
report and after touring and deciding which location works best they will send a request for
approval to the New York Office to apply for a leasing agreement. Once the New York office
has approved this request, the regional branch manager will meet with the leasing company to
apply for and sign the leasing agreement.

Cost Analysis
1. Location One: *$17.50 per square feet a year
a. 4,643 square feet
b. Currently includes 8 private offices, a kitchen/break room, a conference room,
and an open floor plan for installing cubicles
c. Does not include utilities, but estimated utilities should total around $5,000 per
month, $60,000 per year
d. Yearly Lease Estimate by Square Feet Per Year: $81,252.50
e. First Year Lease Estimate with Added Utility Costs: $141,252.50
f. **Estimated Total for a Three Year Lease with Utility Costs: $423,757.50

2. Location Two: *$22.00 per square feet a year

a. 3,650 square feet
b. Includes a bare, spacious office space that would need remodeling to include a
conference room and kitchen/break area
c. Would need to remodel to include a conference room and kitchen/break area,
estimated remodeling charges would total around $90,000
d. Includes maintenance and utilities
e. Yearly Lease Estimate by Square Feet Per Year: $80,300
f. First Year Lease Estimate with Added Remodeling Costs: $170,300
g. **Estimated Total for a Three Year Lease with Remodeling Costs: $411,200
*= This rate does not account for possible negotiation on leasing rate
** = This estimate does not account for insurance, taxes, and other extraneous costs

Location two has a more expensive first year cost due to remodeling concerns, but will
total to a yearly $80,300 after the initial year of remodeling, while location one will remain
$141,252.50 for each year with added utilities. However, when comparing the total three year
lease of both locations with added utilities and remodeling costs, location two remains over
$10,000 cheaper than location two. location one offers a complete office that is ready for initial
use, while location two will require a remodeling process that will delay branch opening. For this
reason, location one is more suitable to Dunder Mifflins immediate needs. Location one will be
more expensive because the utility costs are not included, but its prime location in the RIDC
business park off the PA Turnpike will allow for it to become one of our biggest branches for
exporting and importing paper. Also, its placement near downtown Pittsburgh and current
modern office layout will make it easily accessible for making sales calls, and could quickly
become one of Dunder Mifflins most profitable branches.

Goal 2: What buildings or other establishments nearby?

Cameron Blount

Work Completed
The location that we are interested in 230-246 Alpha Dr Pittsburgh, PA 15238 has a
couple of buildings within in a 5 mile radius. Cadence systems located on the same street and
provides the expertise and tools, ip and hardware that is required to design chip packaging boards
and systems. Also located in that same area is Print Tech of Western PA. Print Tech is a printing
company that provides a number of services such as On-Demand printing, Large-Format Printing
and much more.
The other location that we are interested in 201 S Highland Ave, Pittsburgh PA 15206
has more buildings than the previous location it is also a highly populated area. First National
Bank is located on the same street as this location. A local school Sacred Heart Elementary
School is located on the next street over.

Work Remaining
The remaining work is choosing and finalizing the new location that best fits our
company. Negotiating a contract is needed to own the new location. If work is needed to be done
to the new location must be evaluated before move in.

Cost Analysis
If the location 230-246 Alpha Dr Pittsburgh, PA is chosen the cost per year would be
$81,252.50. If the location 201 S Highland Ave, Pittsburgh PA is chosen the cost per year would
be $80,300 . Remodeling for the new location is $187.50 per square foot.
Goal 3: Office Furnishings
Joe Krukowski

Work Completed
Our Inventory Managment Department of the corporate office has a list of distributors it
orders our office furniture and equipment from. Since we already know the number of planned
employees at this branch, we can pre-order all the furnishings we need for the new location
ahead of time. However, due to a recent disagreement with our office chair supplier, we will no
longer be using them for our office chair needs. Instead we need to order our Office chairs from
a new and preferable local dealer.

Work Remaining
We have identified two local office furniture supplies to potentially buy our chairs. Doing
our business locally helps introduce our brand to the area and also helps us meet a potential new
client. Two possible options are:

Chair 1 Chair 2
Black Leather Executive Black Leather Conference
Tristate Office Furniture Mahla Office Furniture

Cost Analysis
By purchasing through a local supplier, the cost per chair is slightly increased, however it
is negated by the possibility of meeting a new client. We already know that for our size branch,
we will need 32 of these chairs.

Chair 1 - Black Leather Executive - $234

x 32 chairs:
$7,488.00 + tax

Chair 2 - Black Leather Conference - $219

x 32 chairs:
$7,008.00 + tax

Goal 4: Will it help the surrounding area

Ger Vang

Work Completed
The first scouted area is located in 230-246 Alpha Dr. Pittsburgh, PA 15238. This
location is surrounded by one store that might cause a potential problem to the business. Print
Tech of Western PA is a printing company which prints On-Demand printing. It will not help
that particular store but other than that, many other stores such as Grane Rx, Abarta, OB/GYN
Associate of Pittsburgh will benefits from our office. Our office will be in the center of these
stores so it will make it less convenient for them to come pick up orders.
The second location that we have scouted, 201 S Highland Ave, Pittsburgh PA 15206
help the surrounding area due to its high population. There isnt any office that provides the
same work as we do nearby, this will help promote our office and make it grow faster. Due to
this, we think the office located in that area will do well. Many of the other surrounding stores
nearby includes PetSmart, Walgreens, Noodlehead, etc. These building will also help our hires if
they ever are in need of goods or a quick meal. This area is surrounded by other quality stores
which will help our office suffice to its growing demand.

Work Remaining
The work remaining are looking to see if there are any other location that will be more
suffice. The location of our store will determine the outcome of our workload. The location of
the office is the most important because if it is located in a rich populated environment then the
demands for office work/paper printing will be in high demand. Due to these kind of situation,
we are still looking for a more suitable location.

Cost Analysis
If both of the mention location is chosen, the total cost for leashing both of them will cost
approximately $161,552.50 per year. $81,252.50 for the location located in Alpha Dr. Pittsburgh,
PA 15238 and $80,300 for the location located in 201 S Highland Ave, Pittsburgh PA 15206. If
other located are pick, the price range should be in the range of 50,000 200,000 for the most
optimal performance for our employees.
Overall Cost
Joe Krukowski

Our final overall cost may still vary based on several factors, mainly, the office location
which will be chosen for the branch. Other costs may arise if their are more unforeseen
difficulties such as the falling out with our previous office chair supplier. With one locations first
year cost of $141,252, and the other at $170,300, lets say the first years rent and utilities will be
atleast $141,252, with an additional cost of $29,048 if the more expensive location is chosen.
The cost of the office chairs is also dependent on choice, so an estimated upper end
would be $8,000 in addition to the $140,000 in equipment and furniture that has also been
ordered.
This would put the overall cost of opening our new branch at approximately $300,000
with an additional cost of ~$30,000 with the choice of a more expensive office location.

Evaluation of Work to Date

Joe Krukowski

With the location of the new branch almost chosen, we have made as much progress as
possible without having the office available to us yet. The area has been studied, and nearly all
office furniture has been ordered. We are now awaiting a final decision on office space to be able
to move further. At this time we are on pace to be where we need to be with our original time
schedule. In order to remain on track, we will need to have a lease for the office space signed
within the next two weeks. At that point we can continue working towards our Grand Opening,
scheduled for 3 months from now.

Conclusion
Ger Vang

The office located in 230-246 Alpha Dr. Pittsburgh, PA 15238 will provide livable
space for 8 employees. That is more than suffice. This location is also good for importing and
exporting goods from and to the office since it provided a wide parking space. It also has direct
access to downtown area which will make it more convenient when transporting paper product.
Although the distance from the location to the OH branch is a 2-hour drive, I would say that this
area is indeed one of the top five location on our list.
 The office area located in 201 S Highland Ave, Pittsburgh PA 15206 may be
appealing to the eyes but it does not provide enough space for any importing or exporting of
paper goods. This will make it troublesome but it does come with a good thing. It is located in
the business district. This will make that specific bloom faster than the other newly open office
due to its location.
Overall, we personally know that these two locations will be more than suffice. It
provides enough working space in a livable condition. Therefore, these two locations have been
chosen as our office that we need to work on. In the meantime, we are also scouting other area to
see if there are better location for our offices.

Recommendations
Ger Vang

One of my recommendation is that we look for a better location while we are still
getting the required furnish. This location should be located somewhere in the business district.
This will allow more of the targeted people to flow through. This also allow us to compete with
other business in the same area. This new area should not be surrounded by any paper producing
stores. By doing so, we will flourish quickly in that certain area, which makes expanding a lot
easier.
Another recommendation is that we cut down on the cost and try to open one to
two more office plus the two that we have already made plan for. This will allow us to expand at
a much higher rate than just opening two offices at a time. By opening three to four offices at one
time, we also allowed the name of our office be known by the targeted audience.
The last recommendation is that we only open one office. By opening one office,
we allow the office to be much bigger than most office that we have. It will also allow for more
paper to be process at the same time which would be more efficient to the office and the client.
By only opening one office, we will have to pick a high population area. This area must contain
certain business aspects. This aspect will help the office grow, as well as the surrounding area.