Build Out Basics

Build Out Basics

Whether you need to make big changes to your commercial space or small improvements, there are some build out basics you should know to help the process go from start to finish successfully. The build out of your commercial space is a costly term in the lease, which means you need to know the details before your sign. Keep in mind that buildout costs generally cost $65 to $75 per square foot when finishing the space from a shell. A landlord may only quote $40 to $50 leaving the tenant to make up the difference. While this arrangement is not unusual, if you are the tenant, it is important to make sure your potential landlord is contributing the desired amount. During negotiations, keep in mind that rent, tenant improvement allowances, and other concessions are intertwined in the process. Now, let’s explore the build out basics you need to know.

Identifying the Space

First up, you need to know how much space you need, now and for future growth. If you aren’t sure, a space planner can help you understand how much space you need for current and future employees as well as clients and customers who will use your space. You also need to know the type of space you need – shell space or second-generation space. Shell space is new, never having experienced a build out. Shell space is literally a blank canvas on which you can create your design. In most cases, there will be no walls, electrical, cabling, or HVAC. Second generation, which could mean any number of generations, is a space with improvements, having been built out one or more times. It will have HVAV, electrical, walls, and more which means you won’t have to build out from scratch.

Planning the Space

Once you have found your space, you will want to consult a space planner, architect, designer, and maybe even a project management contractor. You want to make sure your plan and your space works for you now and into the future (at least for the terms of you lease).

Developing Your Wishlist for the Space

You will want a detailed list of the improvements needed. Your landlord or their representatives should provide competitive bids (at least three) for the build out improvements you desire). The bids should include line items and costs for the work. Even though the landlord controls the final choice of who does the project, you can negotiate costs based on the bids.

The Timing of the Build Out

Your plan is well underway, so it is time to determine the timing of your project. For a shell, 180 days or more is a common schedule due to the time needed to secure permitting, planning, and construction drawings. For minor improvements, the timing is greatly reduced. At this stage, your build out contractor should be able to provide you with a construction timeline.

Adjusting and Finalizing Your Build Out Plans

Keep in mind, that your plans may need adjustments along the way. Don’t be afraid to ask questions, make changes, lower costs, and negotiate as needed before finalizing the bids and allowances. Finalize your build out plans by agreeing to and attaching the final bid, schedule, and construction documentation to your lease. Once completed, if no changes are made, your costs should not change as the project moves forward.

The Build Out

As your build out is completed you should get regular updates on the progress. If approvals are needed, the documentation will be sent to you. If the process is taking longer than promised, ask questions, and require answers. When the process is complete, you will do a walk through with a punch list. Once you are satisfied with the build out, you are ready to occupy your space.