What Are Tenant Finish Improvements?

Signing the lease on a commercial rental space can be an exciting component of your new business venture. A rented commercial space can give you the environment you need to expand your business, interact with customers, or store inventory. The benefits of this move are endless, which is why finding the perfect space feels like the most important thing.

Though finding a great space is definitely important, you should train your eye to see the potential a space has as well. Not every commercial rental space will be set up in the exact way you need it to be for your business, which is why tenant finish improvements exist. Robert Hakes Construction specializes in commercial improvement services and can complete tenant finish improvements on a building to help turn it into your dream space. If you’ve never heard of tenant finish improvements before, knowledge about them may help you decide on a space more easily and get your business up and running a lot sooner.

What Are Tenant Finish Improvements?

It can be difficult to find a space that’s designed perfectly for your business. There may not be enough bathrooms, or walls might be up where you don’t want them. To combat these issues, landlords enlist the help of contractors to perform tenant finish improvements. Tenant finish improvements are custom upgrades completed on the interior of a commercially rented space. These small or large fixes can transform what was once just an empty room into your dream space. With your vision in mind, these upgrades can create the place where your new business will thrive.

What Does It Include?

Some spaces may be just a few upgrades away from being your ideal environment, while others will need much more work. Luckily, there are a lot of improvements that fall under the umbrella of tenant finish improvements. Some examples of work that can be included in a tenant finish improvement are the removal or demolition of existing walls, new paint and flooring, windows, additional bathrooms, conference rooms, and much more. These improvements are often necessary for specific businesses to run properly, which is why they’re considered tenant finish improvements and are implemented in the space.

While there are many things that can be considered tenant improvement finishes, there are also improvements that are usually not included in these build-outs. One of the biggest things not included is any improvements to the exterior of the building. Tenant finish improvements are designed specifically to address the interior upgrades needed to run your business and exclude all exterior improvements. These agreements also exclude things like office furniture, data and phone cabling, and property trade fixtures.

How Much Will It Cost?

The costs of tenant finish improvements will vary from building to building and from tenant to tenant. The cheapest way to get the design that you want is to find a space that is already close to being your ideal set up, but the next best thing is to find a space that is essentially empty. Choosing newer buildings that haven’t already gone through the process of another business’s tenant finish improvements will help you save on the costs of getting rid of them. On the other hand, buildings with many previous tenant improvements that aren’t aligned with your business will cost more money to transform. The cost will vary greatly depending on the size, location, and how many improvements are needed.

Who Pays for Tenant Finish Improvements?

The improvements made to the interior space being rented can be a huge benefit to the space, but who foots the bill? Every situation is different, but the short answer is that it varies. Tenant finish improvements can be paid for by the landlord or tenant, or even be split in half between the two. All of these things are to be negotiated before the tenant signs their lease.

In many cases, a landlord will agree upon a certain amount that can be used toward tenant finish improvements. This is known as the tenant’s improvement allowance (TIA) and can either be a fixed lump sum amount or a per-foot amount. This is the allowance that the tenant can spend on their tenant improvements, and anything over that amount will have to be paid by the tenant.

Another way these costs can be distributed is by the landlord lowering the rent. A rental discount is often used as a way to account for money being used for tenant finish improvements. Tenants are given a discount on the original rent and they’re expected to use the difference to make any improvements to the interior that they feel are necessary.

Who Completes the Build-Out?

If you’ve been given a TIA for a space you’re renting for your business, it’s in your best interest to oversee the construction process. This doesn’t mean that you’re in charge of completing the necessary work but that you’ll be responsible for picking the right contractors to complete the work. This responsibility will allow you to better control the costs and to find a contractor that can complete the type of work that you want in your space. Your workspace will be the next step in growing your business, so you want to make sure it meets your needs and you’re happy being there.

When looking for a contractor to complete your work, you want to make sure you find a company that has previous experience working on commercial build-outs. Not all contractors have the experience needed to work on commercial spaces, which can come with a learning curve when compared to small construction work.

Companies like Robert Hakes Construction have specific experience completing tenant improvements, whether that includes new lighting, paint, fixtures, or other remodeling goals. The stress of remodeling will be taken off your hands as Robert Hakes Construction works quickly and efficiently to modernize your space to be exactly the way you want it to be. These changes can help to create a lasting impression on the customers who enter and the employees who will work there, which is why you want to choose a knowledgeable and skillful construction company for this kind of work.