Tenant buildouts can solve a number of problems for you, whether you’re a property owner or a renter. As a tenant, you won’t have to subscribe to somebody else’s office design and you’ll have the opportunity to see your dream rental space come to life. As a property owner, the real estate value will rise as the space is modernized and updates are made.
Are you ready to build out? Don’t let the idea intimidate you. The benefits outweigh the unknowns, and with the right construction company by your side, this project will be simple and stress-free.
1. Types of Tenant Buildouts
Clear communication between tenant and owner is necessary for the project to run smoothly. Before starting construction, the tenant and property owner need to be on the same page.
Conversations during the negotiation stage should include:
- Who is paying for the project?
- When should it be finished?
- Who is hiring the construction company?
- Is it a turnkey buildout or tenant improvement allowance?
Turnkey buildouts are undertaken by the landlord, who is responsible for the project cost with the tenant’s preferences in mind. The landlord is held liable and is responsible for the project’s budget, even if costs exceed the original negotiation. With a turnkey buildout, the tenant isn’t required to be part of the planning or project stages.
Alternatively, using the tenant improvement allowance format gives the tenant full control to select an architect, hire a contractor and purchase necessary items after negotiating a cash allowance provided by the landlord.
In this case, though, the renter is responsible for costs that surpass the amount negotiated. Negotiations are based on a dollar amount per square foot, so be sure to clearly communicate realistic and practical goals during the negotiation stages, because you don’t want the situation to get messy later.
2. Understanding Costs
Costs vary because all budgets and projects are different. Regardless, both tenant and landlord need to understand how much the buildout will cost. Remember that even if you’re opting for a tenant improvement allowance, the landlord will agree to cover only a specific amount.
Contact us for a construction project bid, so you both know what your project will look like in terms of cost.
3. Find a Reliable Construction Company
Ready to expand your space and increase its value? After all, a tenant buildout is a win-win situation for both the landlord and tenant. At Red Rock Construction, we do all the heavy lifting, demolition and building.
Call our dedicated team today if you’re ready to start your buildout!