Build Out- Tenant Improvement Process

Summary of what is involved in a build-out for a commercial real estate property

Process Overview of Build out for improvements?

 The following is a summary of the process for build out. They can be summarized with these bullet points:

1. Who is going to be the general contractor?

2. Time table to complete the build out

3. Space design and layout considerations

4. Budget – quotes obtained by contractors etc

5.  Agree to plans and permit if required

6.  Understand expenses for FF&E

7. Select the GC (general contractor)

8. Have drawings completed

9. Construction begins on build out

10. Inspect at specific benchmarks and utilize a punch list

 

 

Contractors

A tenant needs a project manager. In addition, an architect, mechanical ,electrical and plumbing consultation. For smaller properties, typically the landlord will provide these services.  Landlords do not provide FF&E assistance typically (Furniture , Fixtures and Equipment). Construction estimates are an evolving plan.

Pick a contractor you are most comfortable with. Try not to just hand out a GC job.

 

Setting Milestones- Design 

Tenants require a clear understanding of the process. Scheduling works best by working the process backwards.  What needs to happen to the space? What does it have to look like when the tenant leaves?

Along with an architect, you will develop a space plan. How many offices you require?  Layout considerations? Restroom placements etc. You may also want to test fit the plan.  Based on the test fit, you may have to adjust your budget.

The architect’s plan grows into the schematic plan. Then comes look and feel. There is a MEP, (Mechanical, Electrical , Plumbing) consultant that works with the architect. For substantial plans, there is a permitting process and filing of plans.

.

Bidding out FF&E

 

  • Start this early-even before contractor quotes
  • Achieve the best quote
  • Hedge one vendor vs. another
  • Workstations take about 6-8 weeks to build
  • What are your specialty items?
  • Understand delivery schedules
  • Some fixtures may take up to 5 months to manufacture

 

Inspections

Final inspections are important. Inspections during and after build out provide a tenant confidence. If there is reimbursement to you as the tenant, you want to make sure there is good workmanship.  After build out, you should have any manuals or cleaning instructions. Also, contact information on whom to contact if there is an issue.

Typically, a total build out will last 6-8 weeks. Simpler improvements take approximately 2 weeks to 30 days.