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Commercial Tenant Finish Aka Build-Out Process

Tenant lease agreement generally stipulate some tenant improvement allowances that designate the budget for constructing your tenant space. Unless the property owner is taking care of the tenant finish and cover all the costs associated with it, you, the tenant, are responsible for any costs over the allowance limit.

More often than not, it is the tenant’s responsibility to construct and remodel the space within the allowance limits. There is a fine line where many tenants and their broker representatives ignore these limits only to get an unpleasant surprise down the road. Thus, it is of utmost importance for you as the tenant to stay engaged throughout the tenant finish process

We suggest the following action steps to make sure you have an outstanding buildout:

  1. Ensure the property owner understands you want your tenant space remodel bid by a minimum of three contractors. Many property owners have their own favorite contractor they trust and always use for any construction needs they have, even though this may not always be in the tenant’s best advantage.
  2. Research and ask experienced tenant finish contractors the questions you feel are important.
  3. Request from your designer to come up with ball park pricing plans to share among the three contractors you chose. It is often a clever idea to including the landlord’s favorite contractor.
  4. Allow 1 to 2 weeks to finish the bidding process depending on the intricacy of the project.
  5. Carefully review the bids received and put close regard to the high-priced elements, pay special attention to the features which bidders have considerable differences as this may be due to the quality of materials they have specified will use, the quantity of labor fees, overhead cost and profits.
  1. Clarify all the elements in the bid you have doubts until they’re iron out to your satisfaction.
  2. Keep in mind that the low bidder is not always your best option. Aside from price, find out about their online reviews and reputation from previous clients, experience in the exact type of work you need them for, scheduled work volume, business credit rating and proper licenses. Request a few professional references and contact them. Request information about their completion date estimate, work quality guarantee, their experience in follow through for any unexpected problems that arise and how often the contractor stick to their original bid.
  3. It is always a good practice to meet your designer/architect with the contractor you have chosen to do your TI prior to work start. The architect and contractor will need to have a cordial working relationship for the next three months and ensure they are agreeable.
  4. Depending on the intricacy of the work needed, you may need to show up every week to construction meetings with your designer/architect and contractor as you need to be on top of things. You must be proactive and be at the jobsite regularly. You may be surprised at the high number of errors you catch by just showing up and reviewing the work going on.
  5. Stay engaged through the construction process as long as it takes, frequently between 3 to 5 months.
  6. Keep a good working relationship with the contractor through the final stages of the project, walkthrough and occupancy permitting process, you may be surprised your presence will make a significant difference as small decisions must be made all the way to the end before problems become too big to change and get what you paid for.

A project scope concept review pre-application may be necessary depending on the intricacy of your construction project. Contact PBI’s Project Team for supplementary Information.

Call us at today at (218) 642-7230 Monday through Friday 8 AM – 5PM CT.