Tenant buildouts can be complex and confusing. When you need to adjust the rented space to suit your needs, it could take a lot of time to negotiate, plan, and execute the improvements.
To save time and money, you need to do some research. It can help you tweak the negotiation process and enjoy high-quality buildouts in the shortest time possible.
We’ve collected a set of important tactics to help you get through the process quickly.
1. Beware of Turnkey Buildouts
Turnkey buildouts may seem appealing to busy tenants. However, a landlord is likely to offer such an option to save money. They may believe that they can rebuild the area for less than you think.
For example, if you share that you plan to spend $40 per square foot and the landlord offers a turnkey solution, they are likely to expect to do it for $30 per square foot and keep the difference.
The landlord doesn’t have any reason to use top materials and search for respectable contractors. Their goal is to spend as little money as possible.
You can settle for a turnkey solution only if it comes with an elaborate contract that describes the entire process, materials, work, and other details.
2. Determine How Improvements are Paid For
Tenant improvements can be paid for in different ways:
· Landlord provides a tenant allowance based on the square footage. The tenant oversees the project personally.
· Landlord offers a rent discount for the tenant improvements (e.g. one free month per year). The tenant pays for and oversees the project personally.
· Landlord offers a package of improvements to choose from. Anything extra is covered by the tenant.
If you choose to take advantage of one of the packages, you are likely to save time. However, the improvements will be rather generic, taking personalization out of the picture.
3. Measure your Space Properly
Space measurements don’t just affect the size of the improvement allowance (if you choose this option) but can also impact your rent. With improper measurements, you may be assigned too much common area and end up with higher rent payments.
The tenant improvement allowance depends on the rentable area. Poor measurements could lead to disagreements and delay the buildout process.
4. Research the Price
If you plan to negotiate the tenant allowance with the landlord, do your research in advance. For example, when the landlord offers $20 per square foot, you should have a clear understanding of whether it’s enough to make the necessary improvements.
To cut down the negotiation time, be ready to offer your own amount, and support your decision with facts and research. The faster you agree on the allowance, the faster you can start working on your rental space.
5. Find a Reliable Contractor
Before diving into the negotiations, you can find a reliable contractor to get an estimate. According to tenant build-out contractors from AFS General, Florida, a respectable general contractor verifies all estimates and prices before giving them to the customer.
This can save you time when negotiating with the landlord. Once the negotiations are over, you can have peace of mind about getting high-quality work.
6. Check the Space
Take the time to check the rental space you plan to improve. Empty space takes much less time to rebuild than an existing one. You need a general contractor’s opinion to understand how quickly an existing space can be adjusted to your needs.
If you already know the time it will take to make improvements, you can take this information to the negotiation table.
7. Review Your Needs
Before negotiating tenant buildouts, you should have a clear understanding of what you need to get done. From carpets and new walls to lights and flooring, create a list of requirements and check it twice.
More often than not, a landlord won’t agree to pay for any luxury improvements. You may want to tone down your requirements to make them reasonable for all parties.
To save time with tenant buildouts, make sure you know your requirements, research the market, beware of turnkey offers, and hire a reliable contractor. With the right approach, you can minimize the negotiation time and keep all parties happy.