Lease negotiations for commercial properties can be more complicated because of tenant improvement projects. Retail spaces, offices, and lofts may all require structural changes before a new tenant can take over the lease. While it can be a more stressful aspect of owning commercial property, having reliable, quality tenants in a space makes construction projects worthwhile in the long run. If you’re new to commercial property ownership or have a tenant request changes to the property for the first time, you may have questions about the improvement process. Here’s a basic guide to tenant improvement projects in the Pacific Northwest.
When should you discuss improvement projects with your tenants?
Tenant improvements take place during lease negotiation, but if neither party has substantial experience in those negotiations, then it can make the rental process more fraught than it needs to be.
One of the simplest approaches is simply incorporating a turn-key build into the lease, in which the property owner handles everything from design and construction to scheduling inspections. However, other approaches include the landlord providing a payout for the renter to manage the project.
In those cases where the tenant handles construction, it’s crucial to define rentable and usable space and which areas of the property the tenant is allowed to change. Either way, discussing property improvements during lease negotiation is critical, so all parties have the same expectations.
What are some of the most popular tenant improvement projects?
Knowing what kind of requests to expect from future tenants can help you to prepare for construction costs. It’s not always the responsibility of the landlord to pay for changes to the property, but it enables you to hire a contractor you trust and get peace of mind about the quality of the work done.
Some of the most common tenant improvement projects include:
Adding or removing cubicles to a floorplan
Building business-specific features, such as a barre for a fitness studio or countertop for a retail store
Soundproofing for gyms, bars, or clubs
Adding conference rooms or a kitchen to an office space
Upgrading the property’s finishes and fixtures
Adding aesthetic and stylish features
Installations to make a space more functional or accessible
In general, improvement projects make a property better suit the new tenant’s business. As part of the lease, you can incorporate the scope of the project, timeline for completion, and finished results.
How to manage tenant improvement projects
Because the landlord is often responsible for the cost, they also handle the management of the project. To adhere to the obligations outlined in the lease, landlords need to ensure construction runs on schedule and communicate any delays to the tenant.
Construction management can quickly become a full-time job, with daily check-ins at the property and sometimes dealing with subcontractors.
The best way to manage tenant improvement projects is to work with a contractor you trust who delivers exceptional quality to tenants on time. Christiansen Contracting has thirty years of expertise in commercial construction across the Pacific Northwest. We deliver completed projects on time for seamless tenant move-in.
Get a quote from Christiansen Contracting for your tenant improvement project in the Pacific Northwest.
The owners of Christiansen Contracting bring over 30 years of experience in residential, industrial, and commercial construction to clients. We’ve operated several construction businesses across the Pacific Northwest, giving us unparalleled knowledge regarding building codes, project management, and more. Since 2011 we’ve been a full design-build contractor based in Redmond. We have an in-house team that can take your project from pre-planning through completion.
Have a commercial property going through lease negotiations? Contact the Christiansen Contracting team for a free quote for tenant improvements.
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