4 Ways to Approach a Commercial Office Build-Out

Commercial office space is rarely set up perfectly for new tenants and often has to be built out to meet tenants’ unique needs. If your company is leasing a new commercial office space, here are four ways to approach a commercial office build-out so you get the space your company needs.

1. Understand the Building Standard

Commercial leases include a tenant improvement work letter that details what improvements a landlord will make to a leased space before you, the new tenant, moves in. This letter normally includes things like the number of outlets, the number of light fixtures, flooring color options, and door style options. These standard items are known as the building standard.

Before signing the lease, you should review the building standard to make sure you know exactly what’s included with your lease. These items will influence your company’s build-out in two direct ways.

First, what’s included in the building standard will affect how much your company must pay for additional features. Any features that are included are items your company won’t have to pay for.

Second, any additional items you select during the rest of the build-out should match the building standard features. What the standard features look like will impact what colors and styles other features that your company pays for should have.

2. Hire a Contractor to Install Non-Standard Features

Your company should directly hire a contractor to install any features that you want but aren’t included in the building standard.

For example, special light fixtures, drapes, or permanent storage that your company wants should be put in by a contractor whom you choose. Any room modifications, such as additional walls or relocated doors that you’d like, ought to also be done by your chosen contractor.

Many landlords will offer to take care of non-standard features and modifications for you, but this comes at a cost. Not only will a landlord pass on the cost to you, but they’ll also frequently add a 25 to 30 percent surcharge to protect themselves from unexpected expenses.

If you hire a contractor who provides a written estimate, you can avoid paying this surcharge and mitigate the risk of unexpected expenses. A written estimate will detail how much the work will cost and what work will be done, so everyone understands what’s to be completed and how much is to be paid.

3. Talk with Your Insurance Agent

After you have a written estimate from a contractor, show the estimate to your company’s insurance agent. You’ll want to add improvements and betterments coverage to your company’s commercial insurance policy, and the amount of coverage should be equal to or greater than the estimate.

Improvements and betterments coverage is a protection that specifically insures improvements tenants make to leased commercial spaces. Landlord’s insurance policies often don’t cover build-outs, and other forms of commercial property insurance may exclude build-outs as well.

Insurance coverage won’t make the build-out process easier, but you’ll be thankful for this protection if your company’s leased space is ever damaged or destroyed. The protection helps make sure you can afford to replace non-standard items if your company ever needs to after a covered incident.

4. Consider a Multi-Phase Build-Out

If you have many changes you want to make but have to work on a limited budget, you can build-out the new space in multiple phases rather than all at once. This lets you spread out the cost of the build-out over several months or years and pay for phases when future revenue comes in.

A contractor who’s familiar with build-outs can help you prioritize features to determine what should be included in each part of a multi-phase build-out.

If your company needs to build-out a newly leased space, contact Apex Contracting and Restoration to plan a commercial office space build-out.

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