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Tenant Improvement Costs per Square Foot

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Tenant Improvement Costs per Square Foot

Tenant improvement is all about optimizing a leased space for commercial use. It is a very client-specific project, as commercial applications differ between businesses. A well-planned commercial buildout navigates within your budgets and timelines – and primarily meets your business needs. As a tenant, you want to move into the building with an established goal and equipped premises to reach that goal. This is why an ideal project plan will put your brand under the corporate spotlight and create lasting impressions on clients, sponsors, partners, etc. One of the first things to chase is the cost for a complete tenant improvement, and it is a crucial part of your lease. The tenant improvement (TI) allowance is the amount your landlord or landlady will cover for a part of the total buildout expenses – which accumulate per square foot of your building.

These tenant improvement costs per square foot depend on several factors like your project scope and location. A new commercial building, also known as a first-generation building, tends to be more expensive than a previously occupied space – the second-generation building. This is because you invest more in bringing a blank canvas up to a functional standard compared to repurposing an old buildout. This article walks through the various cost breakdowns according to square footage – inspiring itemized bids that you can request from your contractor.

Tenant Improvement Costs per Square Foot

Rough Estimates

When you plan to start a new business or change locations, the costs of tenant improvement rank first in your list of priorities. This becomes even more significant when you have already negotiated a budget with the owner. The general cost of building out an existing space is governed by its condition, your commercial expectation, various permits, material qualities, etc. You can expect rough estimations such as:

  • low range buildouts at $50 – $80 per square foot
  • middle range buildouts at $81 – $135 per square foot
  • high range buildouts at $136 – $200 per square foot
  • custom finish or special use buildouts at $200+ per square foot

First-Gen and Second-Gen

Tenant Improvement Costs per Square Foot First Gen vs. Second Gen

The “generational gap” between buildings is another deciding factor. You will typically pay more to build out a first-generation (shell) space compared to a second-generation space. This is because upscaling from a blank shell or gray shell requires adding all the utilities and functionalities for the first time – creating the need for capital improvement projects. So, you can expect an additional $10 per square foot to your original estimates when you are working on a first-gen space. If you are leasing a second-generation building, it will already be equipped with most amenities like electrical outlets, technological framework, HVAC units, etc. The previous tenant will have installed the basic additions, so you would just need to pay for accommodating your needs (assuming that you like the systems that were previously installed).

  • first-gen buildouts: $70 – $200 per square foot
  • second-gen buildouts: $50 – $165 per square foot

Interior Buildouts

Tenant Improvement Costs per Square Foot Calculator

The quality of corporate interiors strongly affects the average tenant improvement costs per square foot. Custom finishes with high-end materials are naturally more expensive and aim towards quality-driven outcomes. They set the bar for executive offices in the commercial world. A basic office space would use just the standard lighting, millwork, HVAC units, and finishes (floors, ceilings, painted wall) would give you the most affordable price tag.

Upgrades to wood veneer, wall-sized glass windows, high end carpet, and extensive utilities will make a mid-range buildout. Finally, the executive office space claims the heaviest price tag, with custom artwork, granite, acoustical fabric, and premium products stealing corporate glory. This is one of the reasons why the average cost for just interior finishes has been on an upward trend over the years. Some interior improvement costs include:

  • office spaces: $51 – $157 per square foot
  • phone and computer cabling: $2 – $3 per square foot
  • furniture: $28 – $80 per square foot
  • gym: $155 – $210 per square foot
  • conference rooms: $150 – $205 per square foot
  • dining and kitchen: $162 – $241 per square foot

Hard Costs vs Soft Costs

These two types of improvement costs help you understand your investment better – and build the ground for impactful negotiations with the owner. Hard costs refer to the actual physical improvements made to a building. These modifications tend to remain in place even after you – the tenant – vacates the premises at the end of your lease. So, these hard costs actually benefit the owner in the long run, since you have paid for the major infrastructure and utilities to support your occupancy. Some examples are doors, windows, paintwork, millwork, HVAC units, acoustics, electrical frameworks, plumbing, and carpeting. This also means that all the material and labor cost contributions are covered as well – making hard costs devour most of the buildout pie chart.

Tenant Improvement Costs per Square Foot Hard Costs vs. Soft Costs

Soft costs take up a considerably less proportion of your total improvement costs. They do not offer physical improvements to the property. Instead, these costs cover the approval, service charges, tax, and supervision needed to fuel the actual project. They may include building permits, inspection fees, and various contractual elements.

  • hard costs consume around 75 – 85% of the total improvement
  • soft costs consume around 8 – 12% of the total improvement

Online Tenant Improvement Cost Calculators

Various tenant improvement buildout calculators can be found online to receive averages per square foot. They usually take in details like your commercial application – for example, retail or office – and your location. They might also ask for numerical specifications that you can choose from drop-down lists. On the whole, an online tool follows the most recent calculation methods based on the latest costs in the construction market. You can receive estimates per square foot or a final cost if you have entered the total square footage. Two of such tenant improvement calculators are:

Square Footage Factors

The average costs per square foot will always fluctuate with certain factors. They affect your total investment because your project can never begin without considering these areas. You need a good vantage point to optimize the square footage and distribute the costs efficiently. Some of the factors that drive your building’s per square foot costs – and potential – include:

  • your tenant needs for commercial specialties – like restaurants and schools
  • the age and condition of the building – the generational differences, renovation size, etc.
  • the material and labor costs – based on regions

TI Allowance

Tenant Improvement Costs per Square Foot Calculators

The TI allowance that will fund some part of your buildout is also calculated per square foot. You will negotiate these costs with the building owner as a part of your lease agreement. In a tenant improvement buildout, you stay at the frontline of the improvement process – unlike turnkey projects where the owner takes care of everything. This marks a pivotal difference in the financial leverage you can gain as a tenant planning the improvement. Since the building owner provides your TI allowance, your final improvement cost per square foot is actually the initial cost minus your TI allowance.

Negotiating Your TI Allowance

The allowance you receive from your building owner will cover most of your tenant improvement costs. This amount is entirely negotiable, and you must grab the opportunity to secure an optimistic deal. You should also bear in mind that your landlord/landlady might choose to reclaim the offered money – in the form of increased future rents, for example. So, it all boils down to a well-planned negotiation process that works for both parties. You want a fully-functional place that guarantees a successful corporate dream; the owner wants a quick and confirmed move-in. Good negotiation eliminates conflicts down the road and ensures smooth occupancy throughout your lease. Here are a few tips for making the best bargain with your building owner – and they all require you to do a bit of research.

Know Your Commercial Breakdown

Tenant improvement costs per square foot will differ based on commercial use and the level of customization needed. It helps to know your project as thoroughly as possible so that you can negotiate your allowance confidently. And the more you learn in advance, the sooner you can occupy a space that fits your standards. Different commercial spaces will require specific improvements to run those businesses. For example:

  • Office tenant improvements usually focus on open and collaborative workspaces, traditional enclosed offices, conference rooms, meeting areas, reception, breakrooms, socially-distanced workstations, lounges, and various remodeled floor plans.
  • Call center tenant improvements would include technology upgrades for call stations, private offices, conference rooms, reception areas, etc.
  • Restaurant or café tenant improvements require extensive work on the dining areas, kitchens, prep areas, and an overall spatially optimized layout for easy foot traffic.
  • Learning centers and institutes might need special improvements to include a gym and an auditorium in addition to the classrooms and offices.
  • Healthcare and hospital tenant improvements are usually more expensive than others because of their medical and technological specifications. These include heavy-duty flooring and infrastructure to support the medical equipment, safety considerations for the radiology rooms, department-conscious electrical/plumbing/HVAC units, etc.
  • Retail improvements often have common basics like dressing rooms, custom lighting, cashier counters, and aisled floor plans.

Your total cost per square foot is the combined result of all the individual changes you have planned to support your commercial operations. For each room and finished space, the required functional and cosmetic upgrades add to the final cost. So, if you have a small startup business, consider leasing mostly finished and equipped premises to save time and money.

Take Professional Advice

A smart way to understand your commercial standpoint and costs is to enlist the help of professionals and get a clear picture of your business goals with their relevant finances. You have to consider your lease terms carefully and make sure that you do not bite off more than you can chew. You also need to know the scope of your project before signing the lease so that you can receive enough allowance to cover the whole improvement. This includes knowing your numbers – and understanding what goes where. So, before you even start negotiating with the building owner, consult tax advisors, accountants, potential contractors, project managers, and interior designers. Collaborating with experts will give you better insights into the project costs per square foot – and you can decide if the owner is presenting a valid allowance offer. The more awareness and fluency you demonstrate with numbers, the stronger your negotiation is going to be.

Clarify Your Expectations

Another benefit of discussing with your experts is that they can guide you about core issues like legal implications, tax responsibilities, who gets more control over the buildout, where the unused TI allowance goes, and the official rent date. Using their advice, you can negotiate your right to choose your own buildout team and have more freedom with customizations – compared to accepting whoever the owner hires.

You might want the unused allowance for covering any future upgrades, so this is something you must bring to the negotiation table. Seeking professional advice beforehand will also help you negotiate the terms of your lease better with the owner when it comes to the liability sections, for example, who bears responsibility when something goes wrong. Apart from working out a reasonable TI allowance per square foot, these expert consultations shed a lot of light on lease perspectives – so you will know exactly what to include in black and white and prevent legal setbacks down the road.

Discover Win-Win Areas

Tenant improvements usually benefit both the building owner and the tenant for many reasons. A tenant is more likely to occupy an improved and equipped commercial space that works perfectly for their business. This in turn means confirmed occupancy and incoming rents for the landlord/landlady. Also, if the owner agrees that your added changes to the space will make it more rentable for future tenants, then that is a huge tick box for a TI allowance. Anything that helps owners rent out their space consecutively will encourage them to cover your tenant improvement costs per square foot. Since the renovations you introduce will stay there after you leave, you really have no way of recovering any personal spendings on the project. For this reason, talking to an expert can help you avoid overspending on improvements – only to leave them behind after a short-term lease. You can consider bringing up such permanent improvements during your negotiations to increase your chances of a more inclusive allowance.

Another win-win situation would be an improvement that extends to other tenants in the building. Lobby renovations that benefit your business will automatically influence the other tenants as well. If your leased floor in the building has no space for employee recreation, and you plan to add a common recreation room/breakroom/gym on the ground floor – accessible to all tenants – then this is all the incentive an owner needs. In this way, what appears to be project funding to you might actually be added property value to the owner. To make the best out of the available space, take your evaluations, measurements, and initial costs per square foot to your experts. Understand the potential at hand and think outside the box with them to reach such win-win possibilities.

The Pandemic and Its TI Cost Per Square Foot Impact

The COVID-19 outbreak has influenced socially distanced workstations and downsized businesses in its wake. This did result in a staggering impact for buildout scopes, with startup firms already redefining the commercial footprint. Increased transitions to Zoom offices should have reduced the average buildout costs per square foot. However, the pandemic also introduced bans on construction supply streams like manufacturing and transportation – causing a spike in material and labor charges due to resource scarcity.

Most businesses aim to keep up their brick-and-mortar presence by implementing COVID-proof precautions. This is why the construction and buildout services are expected to stay immune from the COVID impact. The increased costs per square foot during these times will, apparently, decide the future trends with companies working hard to remain open.

The Final Takeaway for TI Costs per Square Foot

Before you embark on the tenant improvement life cycle, make sure to get your financial bearings mapped out clearly. You will improve a raw commercial space to adapt to your business scope, so there is a lot of room for customization. The upgrades and new additions should reflect your brand identity, employee satisfaction, and reputation with clients. Most improvement projects these days focus on workspace evolution to maintain a COVID-proof environment and promote creative collaborations.

The traditional buildout portfolios are abandoned in search of new ideas, especially by startup companies who want something original. Creative spaces and quality improvements are at the nucleus of every custom buildout, as tenants do not just want a fitted-out space to move in – they look for dynamic interiors for inspired working. As a result, your project size and complexity determine your tenant improvement costs per square foot. You want to configure and personalize the space uniquely and receive accurate buildout quotes from your contractor. This brings us to bid itemization, which adds enormous relief when you are trying to narrow down the contractor pool. Finding out exactly what you will pay for gives you a good head start in budgeting and finalizing. Most importantly, it reinforces your end of the negotiation with the owner, so you can strike up a good bargain that won’t hesitate to walk the extra mile in your buildout.

Tenant Improvement Commercial Construction Schedule Using Microsoft Project

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I wrote about this briefly in my blog post about how to be a good superintendent, but it’s worth stating it again.  Being able to create, maintain, and meet a Critical Path Method (CPM) schedule on a tenant improvement construction project is a critical skill for a construction superintendent.  With that being said, I have come across several superintendents who struggle to build and maintain a CPM schedule for TI projects.  This post is going to be all about a straightforward approach to building a CPM schedule.  I am most familiar with Microsoft Project so I am going to be using Microsoft Project to demonstrate how to do this, but the theory doesn’t change for building schedule using the “Critical Path Method” (CPM) approach, otherwise known as the “forward pass, backward pass” approach. 

tenant improvement construction schedule

Now, this goes against all of my instinct as a “teacher” but you know what?  I am not officially a teacher.  I am a builder and if I needed a superintendent to get a schedule done I would just show him how to do it first and then if that superintendent is motivated enough to actually learn the “theory” behind it then I would teach them the theory about it later.  However, if you read my “How to be a Good Superintendent” article then this topic is a major example of how to be a better superintendent.  Learn the dang theory, and care enough to understand why you do what you do!  Without further ado here are the topics we are going to cover in this post so feel free to click to where you need to go:

How to Build A Tenant Improvement Construction Schedule

1. Critical Path Method

2. Pre-Construction –Activities Needed Before You Mobilize

3. Construction – Events While Onsite

4. Closeout –Steps to Hand to Owner Space

Before I dig into the details I want to let you know what my approach is to building a CPM schedule: 

1. Focus on the Critical Path Method (CPM) of a Commercial Tenant Improvement Construction Schedule

tenant improvement CPM construction schedule

The critical path of any tenant improvement construction schedule is the list of sequential (back to back) activities that must take place for the project to be complete and that will take the most amount of time (collectively) during the project.  When you connect those activities in a sequence, they will govern the total duration of the project. For example, one of the longest activities that has to take place on a tenant improvement construction schedule is usually the framing of new walls, and then performing the electrical work within those walls. Not only does it usually take awhile to frame walls and rough-in the electrical, but under normal circumstances you are required to get that work inspected, and won’t be able to close up the drywall walls until the inspection is complete. For that reason you will need to focus on finishing those activities before you can proceed to the finishes later so most of the time those activities are the “critical path” on a schedule.

Focus on the Major Construction Trades When you Begin a Schedule

Nowadays, when I build a project schedule I am typically doing it on the front end of a project and I am working with my estimating team to determine how long we will need until we can hit the site (pre-construction) and how long we are going to be on the site and billing the team’s time against the project (construction).  So, I am typically motivated to get an accurate, overall schedule, and to do it very quickly.  With that being said, I am going to try and drill into the critical path as quickly as possible, and I am NOT going to drill into details that are a waste of time.  How do you know what activities are critical path activities before you start a project?  You don’t all the time, but if you have built enough projects in your career then you can get pretty accurate at defining the critical path. 

Is the “In-Wall” Rough-In Work or the “Overhead” Work Critical in a Tenant Improvement Schedule?

When you are doing a tenant improvement there are typically only a couple of possible “tracks” that are going to determine the critical path of the project:  the overhead work and the “in-wall” work, followed by the finishes.  We will dig into the details of those two tracks in the “construction” section, but for now just remember that when you are building your critical path method (CPM) schedule on the front end of the project don’t waste your time by talking about the color of the paint on the walls, or the cool little fabric wall panel in room 999, or the marker board in room 67J, unless you think that it’s going to affect the critical path of the schedule.

Use a Project Estimate to Start a CPM Schedule

Now this topic in construction merits its own article altogether (wow I keep thinking of great things to talk about in my blog!) but the construction industry is AMAZINGLY inefficient, sometimes it makes me sick how inefficient our industry is!  The whole process of an A/E firm designing something, for multiple GC’s to price, using multiple subs to help them price, for an estimating team to learn, then one GC gets the project and passed onto an “operations” team to build, is just crazy!  Sorry for the tangent, and we are not going to solve this here today, but my point is that you CAN be efficient by using what your estimators have done before you!  When the budget was built the estimating team dug in hard, and they usually do a GREAT job of summarizing everything for you in a nice scope leveling sheet, bid summary, or similar.  USE that information when you draft your first schedule! 

Use the Following information from a good estimate to Start a CPM Schedule:

  1. What trades are involved with the project?
  2. How much is each trade’s scope worth (LOOSELY translates into activity duration)
  3. What are the big (and small) activities that each trade is performing
  4. BONUS – sometimes estimates include information on long lead items and durations in the field already.

So looking at the above list – you have pretty much ALL of the data that you need to put a schedule together, now you just have to do it!  Are you missing some information?  If you have 80% of the list above then it’s super easy to fill in the rest.  You have a list of subs to call with questions, and at least a sense of how your estimating team thought this project was made up in terms of major scopes of work.  Now for the EASY and FUN part, at least in my mind! 

2. Pre-Construction – Tenant Improvement Construction Schedule

The pre-construction portion of your schedule is typically a list of everything that needs to happen before you mobilize onsite to actually start the work.  This list can and will vary depending on your specific project, of course.  Again, even with pre-construction I really like to target the major activities that I KNOW will affect the critical path of the project and that will force you to “wait” until you finally mobilize. 

tenant improvement construction schedule

Pre-Construction is usually something a superintendent or operations teams is not totally involved with so it’s easy to skim over it when building a schedule (I should know as I have minimized a pre-con schedule before).  Now I know more though, and you should too after this article!  Getting a tenant improvement commercial construction schedule right during Pre-Construction is JUST as important as getting the construction portion right.  Why, you ask?  I know, a lot of projects “start as soon as possible” but if you can prove with a CPM schedule that you should “start” but that “starting” should NOT mean mobilizing and charging team members to a project full time, then you can save your company and yourself a lot of headache by starting onsite only as soon as it makes sense. 

Here are some examples that may fall on your pre-construction schedule:

Selection of General Contractor 

Before you start the project you obviously need to get awarded the project first!  I usually start here.  Let’s say it’s a hard bid, or final negotiation of a cost-plus or guaranteed-maximum-price contract.  It always helps me to list when we are turning in a budget or a bid and then give the owner enough time to make a decision.  After the owner makes a decision there is still some time left to create a contract and get it fully executed. 

Completion of Drawings

If you sign up for a cost-plus project, early on during design, then the next order of business will be the completion of drawings.   It depends on how big and how far into the process is when you are signed up as a GC but chances are pretty good that you will need to add some activities such as “SD’s”, “DD’s”, and “CD’s”, and the pricing that will have to follow the completion of each drawing round.  If you just won a “hard bid” or signed a “lump sum” contract then this will be easy as the plans should already by completed and all you have to do is go to the next step in the process.

Building Permit

After the contract documents (typically plans and specs) are finalized the next step in every project is obtaining the building permit.  This one is very critical because most jurisdictions require a permit in place before construction can begin onsite so a late building permit certainly has potential to stop a project in its tracks.  Sometimes you can get away with starting ahead of a permit by either getting a grading permit, getting a foundation permit, or by just starting (and not having to call in an inspection) but this certainly raises the risk of the project getting shut down pretty quickly, and potentially your general contractor’s license!  So it’s not a decision to be taken lightly, and I recommend making sure a building permit is in place before even thinking about starting.  Another wild card in this category is the potential for a “re-submittal”.  When a permit is initially rejected the duration that the creation of a re-submittal package as well as another review by the building department has the potential to double or triple your anticipated building permit duration so it’s something to keep an eye on during pre-construction.

Buyout Subcontractors

After plans are complete and your budget is settled up then the next step in the project is typically signing up your subcontractors.  Again, this process is fully dependent on the project but typically will have determined what trade is most critical and you will typically start to buyout the most critical subcontractors first.  You can determine who to buyout first by calculating how much their anticipated lead times will take to procure their equipment or material. 

Submittals and Material Procurement

After you buyout subcontractors then the next activity in the schedule is to receive and get submittal packages approved, and then to finally procure and get the material or equipment delivered to the site.  This portion of the pre-construction schedule is probably one of the trickiest to figure out, and frankly is one of the main reasons why using the critical path method (CPM) scheduling method is the way to go over a standard “handwritten” or “excel” schedule.  Sometimes you don’t know what is really going to drive the schedule.  Sure, it’s easy to say that the longest lead time material is going to drive the schedule but what if you don’t actually need the long lead product until halfway through the schedule?  This is why I really appreciate a CPM schedule because after you type in ACCURATE information and if you get the links between activities correct then the CPM will tell you what activities are critical!

Real life example on why pre-construction is important in tenant improvement construction schedules:

We just bid a remodel project at a university the other day and identified light fixtures as a long lead item.  At face value, it appeared that we could easily build the project in the required timeframe.  They gave us 65 calendar days and I figured the work will take about 6 weeks from start to finish.  After I typed in my normal pre-construction activities and included a 6 week lead time for the light fixtures, then those 65 days to complete the work just shrunk!  It didn’t shrink by exactly 6 weeks as we had some work to do ahead of the light fixtures arriving, however we certainly didn’t have those extra 20 days anymore!  Now it became a tight schedule in the field!  This does tend to happen a little more with structural elements (steel, precast concrete) on ground-up projects but it definitely still rears its head on tenant improvement projects as well, especially when the TI is a little more high end with finishes (flooring, millwork, wall panels, storefront or glazing) or they look at using some custom light fixtures.   

3. Construction – Activities While Onsite for Tenant Improvement Schedule

The construction portion of your CPM schedule is obviously the most important part of your schedule.  If you are a superintendent, a developer, an owner, this is the part that determines how you are going to install thousands, hundreds of thousands, or millions of dollars of material and equipment into a space in a RELATIVELY short period.  This is the road map that is going to drive what you are going to be doing every week, every day for the next 2 to 36 months!  So let’s get it right! 

Destroy (and Re-Build) the Estimating Schedule

First things first.  The schedule must represent exactly what you will be doing to build your project.  I talked above about leaning on your estimating team for historical knowledge, and all the work that they put into the project before you arrived.  Absolutely use their “preliminary” schedule for a basis of where to begin.  However, if you use their schedule and try to pass it off as “your” schedule for the next few months, you are probably not going to do that well.  Sure, the estimators or pre-construction team are dang good at construction, and they have a general idea about how the project is going to progress, but you NEED to take their schedule and THROW it out for three reasons:

1. You (the Superintendent) are the Expert

You are the one building the project, and (hopefully) you just came off of a few projects that were similar to the one you are about to build.  I am sure the estimators have a general idea about how quickly something can get built but to have a schedule accurate enough for you to plan each of your days for the next few months you need the particulars about this project.  Some details that you need to dig into include how busy the subcontractors are, what kind of inspections need to be called in, any phasing or work hours required for the project, and what the best “flow” or “direction” looks like for the project to get the most “bang for your buck”.

2. You Need to Buy into the TI Schedule

It’s easy to complain about a schedule if it’s someone else’s.  Just like when subs don’t buy into a schedule when you try and force it on them, this is the same situation.  If you don’t dissect the schedule and re-build it, then you will never know if something is missing, or inaccurate, too aggressive, or too slow.  Your subs are counting on you for an accurate schedule so make sure that it is showing what you need it to show from day one. 

3. Find Your Approach

There is almost always more than one way to approach a schedule.  Most of the time there is an obvious “best” approach but sometimes it’s a little less clear.  If your construction company is like the one that I work for, most tenant improvement projects have a maximum of 3 weeks to bid a project (if you are lucky).  Want to guess at how much time is spent on a schedule during those 3 weeks?  One hour?  Two hours?  I used to estimate and still do on occasion when necessary, and one thing that I LOVED about estimating is that:

  1. There is always a hard deadline where you have to turn in what you have and then either throw it away or turn it over to operations and
  2. That means that sometimes you just have to get things “good enough” or, in other words, make sure that the project has enough money or time to deal with something without actually solving the problem. 

That’s where you come in. A tenant improvement construction schedule project is always “Tee’d” up for success (again, hopefully!) but it’s up to your team to execute and deliver the project. Dig in and figure it out! Ultimately you are responsible for the result of the project schedule so you might as well give it your best effort!

4. Understand your Company’s Perspective

Hopefully you understand how important pre-construction is after I wrote WAY too much about it above, but the construction portion of a schedule is truly the most important part.  After you mobilize (usually this is the first activity I list on the construction portion of the schedule) the “clock is ticking”.  Sure, the project started when your company was awarded the project but it is amazing how much less a client cares about a delay in a schedule when it isn’t costing them money!  I know it’s a little bit stressful to think about it this way but I like to put it into this perspective:  your company is paying you to complete your current project for every day that you are on the site. 

5. Protect Your Company GC Cost Overrun

It’s not usually on “top of mind” for a project team to think of it like that, but it’s something I think about all of the time because I have led projects that have gone over their “general conditions” labor budget before.  You know what happens then?  Either your company must ask your client for more money (if the delay was not caused by you), or your company eats it.  Not a fun situation either way.  I think I could actually argue that a large portion of my job is paying attention to all of the projects in my group enough to ensure that situation either A) never occurs or B) if it is inevitable, then our team is approaching that situation in the right way. 

Start a Schedule – List your Activities

First of all, I am assuming that you use a “critical path method” (CPM) schedule software. To put it shortly a CPM schedule program allows you to link activities together in a construction project to determine which activities are “critical path” and determine the total duration of your construction project.

If you do not have software currently have no fear, as we just created a video on How to Download a Free Trial of Microsoft Project feel free to click HERE to go to that video!

So now you are in front of your computer wondering how the to start a schedule?  The very first thing I do is list all the activities you know have to happen for the project to get built.  It’s that easy.  Just list everything.  Sometimes it makes sense “mentally” to list in chronological order, but it really doesn’t matter with scheduling software nowadays.  For this first step you don’t even need the software.  You can write the list on a piece of paper, type it into Microsoft Excel, or type it into any notepad app for someone else to type in later.

How to Start a Tenant Improvement Construction Schedule

1. Separate the activities by trade at a minimum. 

As mentioned above, your CPM schedule is going to be used to plan out your timing on your project, and that roughly translates to when you need each subcontractor onsite.  So if each activity is not associated with only one subcontractor, then it will lead to confusion.  For example, say that you have wood flooring and carpeting on your project.  If you have a wood flooring subcontractor who is separate from your carpet subcontractor, then you need to list “wood flooring” as an activity and “carpet” as an activity instead of just saying “flooring”.  It may not matter now when you maybe are listing them during the same timeframe, but you want to build the schedule flexible enough for the future should something change.

2. Start with the critical activities

This goes along the same lines as the initial estimating schedule, but I always feel like it’s good to establish the overall, critical schedule as quickly as possible.  I know it’s a little bit the “cart before the horse” because you need to build a schedule before you truly know what is critical but tenant improvement projects typically follow a pretty standard pattern – you have to get MEP above the ceiling and in the walls before you can button everything up and start finishes.  So, don’t start by listing a ton of things that are never going to be critical (i.e. typically like door hardware, or rubber base), list the big activities that you suspect are on critical path, like drywall or in-wall electrical.

3. Strike a balance between being too broad and too detailed.

This one will probably just take some experience, but you have to be careful about getting too detailed or too broad in terms of how much you are breaking up your schedule.  Sometimes this depends on size or complexity of your project but the general rule of thumb that I like to use is you typically want to keep each activity two weeks or less.  With this rule of thumb then you are usually able to update your schedule and be confident that you either are or are not on track based on where you are at.  For example, if you know that you have to hang drywall within about two weeks then you can easily know if you are about 50% after the first week.  If an activity appears to take any more than two weeks, then try and split it up where it makes sense.  Even if you are doing a “big box” retail store you can always pick an imaginary line if necessary.  For instance, you could say “let’s start at the south and work north, when you pass gridline 12 then I know that you are 50% done”.  If you keep it at least this detailed then you minimize the chance that you are actually falling behind without knowing it – say, for instance that you had a month long activity – well 1 or 2 weeks in it will be pretty difficult to know if you are on track or not. 

On the other side of the spectrum; if you get too detailed then the CPM tenant improvement project schedule becomes difficult to update on a weekly or monthly basis.  If you complete the work a little differently than your CPM schedule then you can spend HOURS trying to re-organize the links for everything in order to give a nice, regular update for it.  A construction schedule always needs to be fluid so if you are too locked in and too detailed it will become a disaster when you are coming down the stretch and trying to slam everything in!  Another option and something to think about is whether you are going to keep a detailed look ahead separately from the CPM schedule?  Most of our superintendents do and it allows them to keep the CPM pretty broad while using the 3, 4, or 6 week look ahead schedule to really detail out their days and weeks.

4. Link Activities and Add Durations to your Tenant Improvement Construction Schedule

After you add all of your project activities then it’s time to start adding durations and start to link everything together.  This is really the main difference between doing a simple schedule and turning it into a legit “Critical Path Method” CPM schedule.  There are two approaches you can take to accomplish this.  I have done both, and either are interchangeable, even mid-stream in a project.  My assumption is that you are using Microsoft Project to do this, so if you are not hopefully this still works, but you can honestly do either method with post-it notes if you really wanted.

Link All Tenant Improvement Construction Activities

To get your list of activities into a real schedule you need to start assigning successors and/or predecessors to each activity.  I personally like to start with “mobilize” as the first field activity and then work my way through the project from start to finish.  Again, it doesn’t really matter what order you go but keep in mind that a lot of the scheduling software takes care of the scheduling “logic” for you.  You used to have to take the “forward pass, backward pass” method to figure out what activities represented the “critical path” of the project but now the software does this all for you automatically in real time.  One rule of thumb that I always recommend is to ensure that every single activity has a successor and a predecessor, I know sometimes that some activities will probably never be close to critical path but the whole reason you do a CPM schedule is to let the schedule “work for you”, so it’s always a good idea to make sure the schedule is linked from front to back.  That way if something “turns” critical that you didn’t expect it will pop up automatically and allow you to address NOW rather than have a surprise later. 

Add Durations to Each Tenant Improvement Activity

After you link all your activities then you can add durations to each activity.  Look at each activity and write down how long you anticipate each activity to work.  A few tips on this step:

  1. Business Days or Calendar Days

Make sure that you understand if your scheduling software works in “business days” or “calendar days”.  Microsoft Project works in business days but I am not sure about all the others out there.  I am guessing they are in business days. 

2. Holidays

Also make sure that holidays are built into your scheduling software or put them in manually at least.  The last thing you want is to schedule something on Christmas or Fourth of July and automatically have a built-in disadvantage from the start! 

3. Accurate Durations

Durations are super critical when writing your schedule.  If you have some experience then typically you will be hopefully pretty accurate, but don’t be afraid to reach out to subcontractors to confirm durations.  One bad assumption on one activity can really put a wrinkle in your schedule so please confirm durations by calling subcontractors or checking with other members of your team. 

4. Closeout for Tenant Improvement Construction Schedule

Closeout is pretty similar to pre-construction:  It is sometimes minimized when schedules are built but ignoring something like closeout can really hurt a schedule.  Some tail end activities that could really hurt your schedule include having enough time allocated for inspections, as well as commissioning, punchlist, moving of furniture, preparation of O&M Manuals, etc.. These all take time, and they are pretty much on every single project, so make sure you are not ignoring some of the activities that will prevent you from being able to de-mobilize from the site!

Top reasons to use Microsoft Project for construction scheduling

Huge collaborative scope

Microsoft Project is compatible with other Microsoft programs like Excel, Word, and Outlook – so, you will be able to import your Excel data with all of its formatting intact. Commercial construction teams are already familiar with these programs for everyday tasks, which is why using Project does not feel much different. The interactive tool has a very familiar learning curve that you must have already crossed with other Microsoft products – even first-time users can quickly learn the ropes. Combine Project with Microsoft Teams, and you have the best of both worlds! These two platforms make an efficient pair to support your collaborations, project management, file sharing, meetings, and chats. You can automate schedules, track filtered data, create reports, and even build interactive dashboards for viewing statuses – all of which can be shared with your teams instantly.

Customization freedom

The software allows easy customization for your tenant improvement schedules, helping you keep an eye on everything at once. Microsoft Project has a library of editable templates that you can choose to match your required tenant improvement schedule. These templates come pre-populated with formats and functions relevant to different types of schedules. They are carefully curated and published by experts in the field, so you can always find the right template to build upon. You can also create your own templates and customize them by adding specific tasks and team members.

Convenient scheduling features

Microsoft Project has a bunch of features that make your work easy as a superintendent. You can add new tasks to the schedule, add milestones to mark progress, and set durations for each task. This helps you allocate jobs and respective timeframes for your team members. Project also allows you to inactivate a task that you want to remove, so instead of deleting it, you can still keep a record for future reference. In the previous sections, we talked about linking tasks. Using Microsoft Project, you can link interconnected tasks to show their dependencies in your tenant improvement. Changing one such task will automatically affect the other, and so incorporating this relationship in your schedule is important. Once you have your tasks finalized, you can outline them into a hierarchy.

The main benefit of working with Microsoft Project is that you can set your key objectives first before breaking them down into smaller subtasks. The tool includes Work Breakdown Structure (WBS) codes as outline numbers for each task. Regarding project calendars in your schedule, you can set your business days and timings, mark holidays, and incorporate maintenance days during which all construction will be off.

Critical path efficiency

The critical path is made up of certain linked tasks that heavily influence your project’s finish date. Any delays and mistakes in a single task can trigger a whole domino effect down your schedule – and the last thing you want is an exceeded deadline. Since Microsoft Project helps you establish task dependencies through linking, you can view these critical paths on a Gantt Chart. You can also customize your Project settings to accommodate more slack on your critical path and make essential forecasts. Microsoft Project schedules generally show one critical path, but they can include more than one if you want to track multiple tasks and milestones on your schedule.

Alright guys that’s all I got for this one.  I know it’s difficult to talk about all of this without showing the schedule in action so I am going to try and upload a training video here sooner rather than later!

Thanks and build on!

Dan

Tenant Fit-Out Design Construction Guide

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tenant fit-out design construction guide

A tenant fit-out design construction guide lays the recommendations for making the interior space of a building suitable for occupation. In most cases, the landlord of a building will leave its interiors barebones (otherwise called a “shell” or “white box” depending on how many finishes it contains. The tenants renting the building will hire their own contractor and an interior architect for adapting the space as per their requirements. This activity is referred to as tenant fit-out construction. Here are the broad steps for the tenant fit-out design construction guide that must be followed to adapting a space within a building for occupancy.

What Does the Landlord or Shell Space Include?

The first question that you need to answer for your tenant fit-out design guide is what is the landlord giving you, and what will you need to provide for yourself? Now there are many, many types of real estate leases out there, and the quality of the lease that you sign will make or break the bank, so you truly need to understand what you are signing. I am by no means a real estate agent or a lawyer but I have heard from some of my clients who are landlords about many tenants who signed a lease without truly reading it and then they were surprised at the consequences when they came across hard times and had trouble signing the lease. I am not going to focus on THAT part of the lease agreement in this article but I am going to focus on what do you get for your leased space that is either: existing in the space you are leasing, promised by the landlord that they will complete for you, part of a “tenant allowance” provided by the landlord, or what you will need to pay for with your own money. As stated above, every lease is as unique as the space that you are taking over so it’s important that you understand what is owed to you by the tenant and what you need to complete by your own means.

Existing Core and Shell or White Box Conditions

When you start to look at potential spaces to lease you may notice that some spaces are built out a little more than others. Some spaces have basically “nothing” on them – we call those “cold, dark, shells” and some spaces have “everything” in them including all finishes, HVAC, lights, and sometimes even furniture – those are “fully furnished”. There are some in-between as well such as white boxes (ceilings, walls, HVAC, lights) and some with finishes in them but no furniture yet. If you find a space that meets all of your needs with the existing finishes, or with at least “most” of your needs then you hit the jackpot, and it will make it really easy for you to move in. Most of the time, however, spaces don’t exactly meet your needs, so you usually have to compare what the space is versus what your company or organization requires for your office or retail space for it to meet all of your needs. That is where the next step in the tenant fit-out design guide and honestly where you should start before you start looking at potential spaces.

Landlord Work Needed for Tenant Fit-Out

tenant fit-out design construction guide tenant needs

It is very common that a space that you really want to lease is not finished yet or has some modifications that need to occur before the space will be suitable for you to lease. Landlords fully understand that a space won’t typically be “move-in” ready so a common exhibit to many leases is what is typically called a “Landlord Work Letter”. I usually see it as “Exhibit C” in a lease agreement but I am not sure if that is just dumb luck that they are all exhibit C or if that is because that’s how leases in the US are organized? Either way it should be pretty obvious which exhibit is the Landlord Work Letter because that exhibit is a statement of what the landlord owes you as a tenant before you move into the space. It also normally states “when” the work is going to be completed so that you can plan on a certain move-in date. The landlord work letter can sometimes go as far as modifying walls and adding finishes that you request (if the landlord is a pretty big owner and has his/her own contractors or is comfortable performing all of that work) but sometimes the LL work letter just includes adding storefront or entrances at the front of your space so that you can gain entry. If the space has never been used before and the landlord is not actually performing the build out then another option for the tenant fit-out may potentially be a tenant allowance.

Tenant Allowance for Fit-Out

Since the tenant fit out of your space is going to be based on your company’s needs and tastes then an option that lot of landlords offer is a “tenant allowance”. This is basically a budget that they give you and pay for after confirmation that all work is complete and that all contractors have been paid. All of the walls, finishes, mechanical, plumbing, and electrical systems in a leased space will not benefit the tenant if the tenant were to move out so it’s very difficult to get a loan in order to perform a tenant fit-out. Many landlord recognize this fact so some offer a “tenant allowance” up front to ensure that you have enough cash to complete the tenant build out and move into your space. Now this (of course) isn’t free so most of the time you can expect that it will be baked into your monthly lease rate, and when a landlord spends thousands (or millions) of dollars up front for your space you can certainly expect a pretty long minimum lease term and some penalty clauses that will come into effect to break your lease. The space is still worth “more” than if it were an empty shell or a white box but it is not going to be worth “dollar for dollar” what they spent since the space was exactly catered to your needs as a tenant.

Cash for All Remaining Tenant Fit-Out

If a tenant allowance isn’t an option and/or you don’t want to raise your monthly lease rate (and the percent that the landlord marked it up) then the final option is cash. Now, there may be some loan options out there (I know some exist at least) but the final option is just putting in your own money to the space. Again this is pretty risky and if/when you move out of the space it will all be for naught but an office or retail space is usually where you perform most of your business so sometimes it’s important to get it just right! Now cash may also need to come into play on your tenant fit-out construction and design guide if you get a tenant allowance but you just want some extra touches above and beyond the budget as well. That is great, but definitely something your company will foot the bill on!

Define Your Needs for Your Tenant Fit-Out Design Guide

tenant fit-out design construction guide define your needs

Shifting to a new place allows you to design the interior based on your goals and needs, which may not have been possible at your previous location. Before beginning the fit-out process, you must think about and consider the requirements for your space. This is very important to figure out even before you start looking for spaces, but it is especially important when you have narrowed down your space selections or after you have selected a space. Here are some of the requirements that we recommend you consider (in order of importance): Space, Utilities, Amenities, Finishes.

These needs are sometimes actually pretty hard to define, especially if this is the first time you are looking for a tenant space. If you have an “old” space it is usually a little easier to figure out what was wrong with your old space. Regardless, sometimes a tenant will actually reach out for help at this point to try and determine exactly what your space needs.

Tenant Fit-Out – Overall Space and Layout

tenant fit-out design construction guide overall space and layout

The actual space and layout of the building or floor that you are looking at is the best space to start when planning for your new tenant space. The few major questions you need to ask are “will this space be big enough for my company’s and customers’ needs?” and “does the space actually fit my needs”? These are big questions for your tenant fit-out guide and they need to be answered simultaneously because how you organize your space will determine how many square feet (SF) per person you will need to be comfortable. For example, if you need private offices for each person then you are probably looking at needing about 120-140 SF per person. If you are looking at workstations (i.e. cubicles) then that may start to drop closer to 70 SF/per person. If you are doing a tenant fit-out of a retail store then that is an entirely different conversation because you need to figure out how much product you want to display, how wide the aisles need to be, and how many customers you want to be able to fit into the store comfortable. Additionally, a final question you need to ask will be what your entrance and lobby looks likes, how many or what type of conference rooms or training rooms will be needed, and what does the break room and restrooms look like? Answers to these questions will help you to start targeting specific spaces or allowing you to confirm that the space you have targeted meets your needs, but it also may start stirring some additional questions about utilities as well.

Tenant Fit-Out – Existing or New Utilities

tenant fit-out design construction guide utilities

What are the various facilities you may require? Are your energy (power) and water requirements being met at the location, or will they need to be upgraded? If you require data connectivity for a LAN or WAN, make sure that it is feasible at the location. Security and monitoring systems must also be considered when defining your requirements. The cooling capacity required to keep the interiors cooled will be another factor to consider. For every utility that does not need your need, it will cost money in the lease, and landlords are usually pretty savvy, so most of the time it will result in the tenant either paying costs up front to modify the space to need their utility requirements or the landlord will do the upfront work but you can certainly expect to see a monthly price increase.

Sustainability is an important aspect of the process. You must aim to utilize electricity and water efficiently while minimizing the wastage of resources. It will not only be good for the environment but will also result in cost-savings for you.

Sustainability guidelines

Work with sustainability experts

If you are relocating your business to the new premises, then a sustainable tenant fit-out design is just what you need. Relocation is the perfect opportunity to go green and start over with energy-efficient alternatives. As a tenant and businessperson, you need to align your corporate goals with maximum sustainability. The best way to do this is to consult professionals like LEED experts who specialize in sustainable construction. They can give you tailored and realistic advice on your green-friendly tenant fit-out design by considering your specific commercial standpoint.

Your sustainability team will guide you based on relevant practices that can actually benefit your business as well as the environment. A business that follows LEED guidelines, for example, will become eligible for a sustainability certificate. LEED green building solutions are applicable for all kinds of fit-outs and businesses – so there is always something valuable for education, retail, healthcare, and hospitality tenants to consider. You cannot bring down your carbon footprint to a magical 0%, but you will be surprised to learn how simple some of the solutions for effective reduction really are.

Factor sustainability into lease negotiations

A good construction guide for tenant fit-out designs will be incomplete without some advice on impactful negotiations. If corporate and environmental sustainability is your goal, then you need to discuss this in tremendous detail with your landlord/landlady. Green practices simply have no “side effects”, so any lease agreement that adopts a sustainable work style will benefit both the building owner and the tenants. Another reason to work with green experts is that they can guide you on how to incorporate sustainable priorities into your lease.

You can then clarify your objectives during lease negotiations, as when you talk about existing or new utilities, you can decide with the owner if the current framework needs to be updated. This automatically opens some room for a more inclusive tenant improvement allowance that covers utility monitoring and waste management.

Take employee feedback

Again, assuming that you are relocating your existing business, it is very important to talk to your employees about going green. You can hold meetings and give out questionnaires to take their feedback on what exactly the business needs. Their answers and contributions to your sustainability plans can actually bridge a lot of gaps in your current understanding. This is because your employees have a firsthand perspective on everyday activities and know the good and bad about the workplace. Your meetings and questionnaires can focus on:

  • suggestions for specific departments that could be more sustainable
  • current waste management and recycling evaluation
  • ways to dispose of old corporate resources without them ending up in landfills
  • carpooling possibilities
  • changes required for the office environment – like more open spaces
  • need for educating and creating more sustainability awareness among employees

Contributions from your employees will build a sufficiently detailed tenant fit-out design, as you now know exactly what to discuss with your building owner. Based on your employees’ responses, you can also infer how willing or reluctant they are about this transition. You can add as many new utilities as you like to become sustainable, but if your employees stick to their old habits, then there is nothing green about your new office. For this reason, you might want to explore adequate training programs and incentives beforehand.

“Reduce. Reuse. Recycle.”

It all comes down to the 3 R’s! The best construction guide for a sustainable tenant fit-out design is to reuse whatever you can from the old premises – such as furniture, equipment, and lights. Everything from the fit-out to occupancy till the end of your lease must speak volumes about your sustainable approach. It is smart to use recyclable materials, but make sure that you use sustainable AND durable resources that will last the duration of your occupancy.

Once you move in as a tenant in the sustainably designed commercial space, the next step will be to reduce water/HVAC/electricity consumption to manage utilities, maximize natural light and airflow, and use recycle bins more often.

With space and utilities now covered, let’s move to tenant fit-out amenities and finishes!

Tenant Fit-Out Amenities

tenant fit-out design construction guide amenities

This is pretty related to the overall space and layout but sometimes the amenities that a space offers will be a key consideration to keep in mind when you are looking at a space. Some amenities are “benenfits” that are inherent with a certain space, or something that you as a tenant can choose to build into a space. Amenities can vary as widely as each space that you look at but some examples could be what type of restrooms the tenant fit-out has in them or maybe the space has locker rooms and showers for your employees? Other amenities may include a good break area, kitchen, bar, rooftop patio, at grade patio, deck, game room, rec room, workout room, movie theatres, dedicated parking spaces, bike lockers, etc., etc.. Some of these amenities can be “common” areas within a building that a landlord offers their tenants (sometimes for a monthly fee), or they could be built into your own space itself (and you will see the increase SF in your monthly lease), or even the location of a building might be located conveniently such as right in the middle of a city or right near a light rail or subway station. Amenities are certainly a consideration that may come into play, but most of the time I would consider these to be secondary to the first two selection choices including space and utilities. If those two aren’t right you aren’t going to be meeting your organization’s basic needs and have a cool “bar” or “patio” in your space probably isn’t going to be making up for it.

Tenant Fit-Out Finishes

So after you find your new office space to lease, and you confirmed that it fits your needs, it’s got the right utilities (HVAC, electrical, plumbing systems) and it’s got some cool amenities that your employees are going to love then the final decisions you are going to have to make are what kind of finishes you would like the space to see. Some of these decisions may already be made for you because the space may already have some finishes installed but most of the time the finishes will be pretty old and ready for a refresh. The landlord may or may not have influence over the finishes that can be chosen in the space but for the most part this is your opportunity to really figure out what you want your space to look like and what color and design scheme you want to settle on.

tenant fit-out design construction guide finishes

As you can see from above there are many aspects of a potential space that you have to consider in selecting and confirming your final tenant fit-out location. There are many things that you need to get right, and if you don’t get them exactly right then you may either have to spend a lot of money to fix them within an existing space or you will have to deal with complaints from your employees or customers throughout your lease duration. For this reason many potential tenants seek expert opinions. Real estate brokers of course are used to their buyer clients having these questions along the way – they can certainly help to a point but when you need some really accurate design and pricing information that’s where an architect and/or contractor come into play. Some tenants decide to bring a contractor or architect in before they start looking for spaces or as they begin looking at spaces because they have the tools to sketch the potential of any tenant fit-out space and show you pretty quickly how much that design is going to cost.

Build A Tenant Fit-Out Team

The next step in the tenant fit-out design construction guide is to create a design team for the project. It will comprise of an architect, an interior designer if required, and design engineers specializing in fire, electrical and mechanical services.

Tenant Fit-Out Design Team

tenant fit-out design construction guide design and contractor team

Most of the time you can select an architectural firm or architect and they can usually build their team of design consultants if you don’t have a preference. They are used to leading a design team from start to finish so normally you just need to coordinate directly with your architect in creating your design. You must communicate your requirements to the team and architects who are used to designing tenant fit-out guides usually know exactly what questions to ask. Once you respond to their questions then they can design a pretty good layout of your tenant fit-out space.

Tenant Fit-Out Contractor

tenant fit-out design construction guide contractor partner

If you have already selected a contractor, they will be a part of the team as well. As a general contractor myself, I ALWAYS recommend bringing on a general contractor as early as possible. I can’t count the number of times I have come onboard late during the tenant fit-out process to find out that the space has been selected, the lease has been signed, and a design has been completed that is WAY too expensive for the tenant to afford. Other times, the design is missing some details from the existing space (i.e. it doesn’t have air conditioning) that drives the price way up and that no one notices until the contractor comes on board. Luckily for tenants, GC’s are usually pretty good about offering free pricing advise on a particular space that you are looking at BEFORE you sign a lease so you know exactly what you are getting into before you make any real commitment. We can usually even figure out pricing without having a real layout because we priced office layouts so often we can figure out “typical” layouts and associated pricing pretty quickly.

Shameless plug – If you are looking for pricing opinion on a particular tenant fit-out (especially in Colorado) please feel free to send me an e-mail at dan@danspros.com and I can help you out or put you into touch with someone who serves your geographical area who can!

Landlord Contractor for Tenant Improvement

Sometimes a landlord may have their own contractor and might want you to employ them for interior design. You may want to make sure that the contractor’s rates are competitive and their work comes recommended. In my experience as someone who competes against landlord GC’s on a regular basis – they are usually very competitively priced. If you aren’t building a “Taj Mahal” like space then usually they can get the job done and the landlord obviously has influence over their performance so it usually turns out OK hiring a landlord recommended GC.

Designing Phase

Once your team is set, your architect will take you through the full design process from start to finish. We have some pretty standard “design phase” that I will describe for you right now. Your design may or may not utilize all of these steps depending on how much work is already complete in the landlord space and how big or complicated the design of the tenant fit-out space will be.

Tenant Fit-Out Guide – Schematic Design – Space Planning

tenant fit-out design construction guide schematic design

Once you have selected your designer the very first thing he or she will do is create a space plan or a schematic design (depending on what existing floor plan design looks like). It won’t necessarily show the exact location of walls yet but will show you the number and general orientation of the seating arrangement, the locations of any other types of rooms such as restrooms, break rooms, and conference rooms, and you will be able to see preliminary sketch drawings to give you an idea of the interior of the facility. At that time you can view the design and give your input. If you are still deciding if you are going to lease the space or not this is a great time to decide “yes” or “no” because you should be able to get a general idea between walking the existing space and the proposed layout of everything if you think it will be a great fit for your organization or not.

Tenant Fit-Out Guide – Design Development Stage

After you have approved the preliminary design then the architect will prepare a more detailed drawing of your space. It will layout all of the walls, start to generally define the finishes that you can expect within the space, and they will start to layout all of the ceiling devices (lights, grilles, etc…) in the space. If that meets your approval then the design team can go to the final step in the process. Even if you hadn’t gotten pricing from a contractor until this point I would highly recommend getting an opinion of price from an expert in being able to price a TI buildout, whether that is a contractor or a design team with experience in budgeting fit-outs.

Tenant Fit-Out – Construction Documents

tenant fit-out design construction guide construction documents

After the Development Design documents have been reviewed and approved and the budget has been verified then the final step in the design process is the creation of Construction Documents. Generally this means that the architect finishes all his or her documents to the point where a contractor will be able to pick up the set, set a final price, and be able to build exactly what is shown on the drawings. The architect will give great detail to the dimensions that are necessary and detail out anything that may need it such as any cabinetry, doors, hardware, and a full description of finishes (floors, ceilings, and walls) throughout the entire space. The other consultants such as the electrical and mechanical engineer will be doing the same thing including specifying the exact type of equipment that they want for the size and the exact location of everything. After completion he detailed Construction Drawings will be sent to all of the team member, including the contractor and engineering consultants to give their inputs after reviewing the drawings and may suggest improvements or ways to coordinate the different disciplines. The design team will ensure that the plan complies with the local rules and regulations before they can take it the next step of submitting to their local “Authority Having Jurisdiction” or AHJ for a final approval.

Obtain Approvals and Certifications

After the drawings have been finalized and reviewed, you will have to obtain the necessary approvals and certifications from your local governing bodies or “authority having jurisdiction” (AHJ). Most of the time this will be city where the building is located, but sometimes if you are not in a city officially then you will need to obtain approval through a county or sometimes even the state where you are located. There are normally two types of approvals that you will need to obtain when doing a tenant fit-out – a building permit and sometimes a zoning permit.

Building Permit Approval for Tenant Fit-Out

tenant fit-out design construction guide building permit approval

They will check for compliance with the building, fire, and other disciplines (usually mechanical, electrical, and plumbing) regulations. The architect or construction project manager usually handles all of the necessary documentation for the project. This “approval” process is something that may take longer than you may expect. I would recommend having the architect or construction manager check on the “standard” duration that you can expect in your city or county. If it is in a big city with many regulations then the building permit process can sometimes take a number of weeks like 4-6 for the initial review. Then even more if the first review is rejected and needs to be sent back for approval. Nearly all tenant fit-outs that include new walls, mechanical, electrical, or fire safety systems will need some sort of building department process. There is only other approval process that sometimes (but not very often) comes into play – zoning or developmental approval.

Zoning or Developmental Approval for Tenant Fit-Out

Many jurisdictions have a master zoning plan or master developmental plan in place. This is something that a city council or a planning and zoning committee plans out and seeks public opinion on say like every 10 year or 15 years or so. Basically city (or county) leadership tries to envision what the future of the city growth and development wants to look like and so they base the city’s zoning maps and their developmental standards off of the master standards. So every time a new development is submitted for approval it is approved or denied based on how closely it fits the city’s developmental standards. The reason this is not very relevant with MOST tenant fit-outs is because a tenant usually picks a building that is meant for a business of their type and it usually only effects the interior of the building. However, the zoning or planning approval process may be part of your project if you affect the outside of the building where you are located or if the use of the existing (or new) space is different than what the builiding was originally approved for. An example would be if a building was approved for commercial office use but you decided that you wants to put a brewery or restaurant in one of the spaces. Since this is different than the original intent then it is subject to review by the city and it can also be subjected to comment by the public residents as well since then may be affected by a space changing to a restaurant.

The main reason I bring planning approval up is because it can take a LONG time. Cities usually have committees that only meet once a month and so you have to get in line to be able to receive approval, and then if there is a public opinion process they usually have to post notices for even more time in order to meet the notice requirements. With all of that being said the process can quickly extend to a 4-6 MONTH process if zoning or planning approvals are needed for one reason or another. Like I said it doesn’t usually affect a tenant fit-out guide process but I have had a new single exterior door hold up an entire project for 6 months since it triggered a zoning review.

Tenant Fit-Out Construction Guide

So after you find a space you like, you get the design of the new space completed, and then you get the design approved by your local authority having jurisdiction (AHJ) you are FINALLY able to start the tenant fit-out construction process. If you haven’t engaged a contractor at this time, then now is the time to select a contractor to hire to build your tenant fit-out. You can approach the well-recommended ones in your area, ask the architect for suggestions, or even ask the landlord for suggestions. As I stated before most landlords have a few general contractors that they work with on a regular basis so they are usually a pretty good source of information. You can give the contractors the designs and ask them to place their bids. After the general contractor is awarded the project then there is a pretty typical process that takes place when the contractor is on board. Every tenant fit-out is unique but you can usually expect the following fit-out construction phases to take place during construction. During this entire construction process the architect will routinely visit the site to ensure everything is in order while the construction project manager will update you regarding the progress. Normally it is a pretty involved process and the construction team will hold weekly meetings to share progress and to discuss questions that come up along the way:

1. Procurement

After award the contractor will begin procuring materials and hiring subcontractors after you have accepted their bid. In a tenant fit-out this normally only takes a few weeks as it usually makes sense to start onsite pretty quickly unless a few really custom or hard to procure items have been selected in the design process.

2. Demolition

tenant fit-out design construction guide demolition

If anything in the original space still exists that is no longer going to be used for your new tenant fit-out space then the first order of business is removing all of the old finishes or systems and disposing of them.

3. Rough-In

Rough-in is typically everything that you don’t see after the finishes are complete. So any framing for walls, electrical systems, mechanical or plumbing systems are usually installed at this time. They are usually either put underground or under the slab if necessary (usually plumbing), on top of the ceilings, or within the walls. You won’t usually see or notice these systems in the completed space but they are necessary so that you can have outlets, sinks, air conditioning, etc.

4. Finishes

tenant fit-out design construction guide finishes

After the rough-in is completed then the general contractor usually moves to finishes. This typically consists of ceilings, finishing and painting of walls, and then the flooring. Finally if you have any countertops, millwork, or anything else “built in” to the space it will be completed right around the same time as the finishes.

5. Trim Out

Once the finishes are complete then the final step is to “trim out” all of the systems. This usually consists of putting plates on outlets and switches, installing final light fixture trims, plumbing fixtures such as sinks and toilets, putting grilles on for air conditioning and heating systems, and installing any doors and hardware for the space. This is normally the final step in the construction process before the general contractor calls for final inspections.

6. Final Inspections

After the space is completed by the general contractor the building department and fire department are called to come in for final inspections. The building department typically has been getting periodic calls to inspect all of the “rough” systems but the building department and fire department usually require one round of final inspections for every system (building, fire alarm/fire suppression, mechanical, electrical, plumbing) and just a final “life safety” inspection to ensure that the space was built properly and it is ready for occupation by the public. After the space is approved by the city then it is usually ready for your organization to move in.

7. Punchlist

One final step in the tenant fit-out construction process is “punchlist”. Just like the city being able to come in for one final inspection, the general contractor will typically ask their client to come in for a final approval walk as well. This is usually called a “punchlist walk”. Since tenant fit-outs are usually pretty big projects with a lot of finishes and systems, it is pretty normal for clients to find things within the space that don’t quite meet their expectations. They have the right to come in and mark items for correction before they give their final “sign off” for the tenant fit-out space.

Final Completion of the Tenant-Fit Out Process

After the construction work is completed, final inspection has been obtained, and punchlist walk has occurred, then it is usually time for your organization to move into the space. This usually means all of your furniture, fixtures, and equipment or FFE for short. This means your desks, chairs, appliances, computer equipment, or whatever else you are bringing into your space to make it your own and allow your organization to use the space as intended. Your tenant fit-out process is complete, and you can occupy your new space!

Commercial HVAC System Cost per Square Foot

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Commercial HVAC System Cost per Square Foot

A commercial HVAC installation is a very extensive project. It includes various ductwork, piping, and heating and cooling elements throughout your commercial building. A well-established HVAC framework ensures optimum indoor air quality and long-term returns down the road. However, a commercial HVAC project demands high upfront costs to launch your intended plan. Regular testing, preventive measures, maintenance control, and professional servicing are some of the key follow-up steps after a successful installation. This helps keep the HVAC system up and running for maximum efficiency in your commercial building. Your HVAC units are crucial to the smooth operation and workflow of your business. They create comfortable environments for your employees and clients to work in, and the system is often used to control the climates of various machinery, equipment, technological elements, etc.

Investing in a quality commercial HVAC system is, therefore, an important decision for your business. Cost estimates depend on different factors. There are options to invest in preventive maintenance aspects so that a customized HVAC layout detects problems early on. Different HVAC companies offer various packages to suit your project scope and budget. Your commercial HVAC system cost per square foot will be determined by the spatial layout and the specific heating/cooling units you prefer. This is a good time to negotiate the future maintenance services as part of the installation package for productive returns down the road.

Components of a Commercial HVAC System Cost per Square Foot

Working with reliable HVAC companies is always helpful, as you can count on the professional expertise of the teams you hired. It will help you to understand your commercial building’s infrastructure better than before. From hidden red flags to efficient alternatives, a thorough consultation allows you to optimize your HVAC performance and cut down expensive maintenance in the future. A typical cost breakdown for a commercial HVAC system cost per square foot includes several HVAC factors, some of which are discussed below. These impact your cost estimates, so it is important to guide your budget realistically keeping the key HVAC components in mind.

Heating and Cooling Plants

Commercial HVAC System Cost per Square Foot Heating and Cooling Plants

Boilers, chillers, water treatment systems, and pumping mechanisms are the core components of your heating/cooling plants. Their capacities depend on your commercial building size. Your HVAC system may also require various specialty parts such as valves, expansion tanks, gauges, etc. These systems can be tailored to your business’s specific needs, and they play a huge role in improved HVAC efficiencies – thereby impacting your cost approximations.

Air Handling Unit (AHU)

Commercial HVAC System Cost per Square Foot Air Handling Unit (AHU)

AHUs are a part of your commercial HVAC system. An AHU is a machine that takes in outdoor air, conditions it by heating/cooling/humidifying, and circulates the clean air back into the building. Various blowers, heating/cooling coils, filter racks, chambers, centrifugal fans, and sound attenuators are housed within a large metal box – all of which are collectively known as an air handling unit. It is available in different sizes and commercial configurations, and these affect your overall cost estimates for the entire setup. There are also different types of fans and filters to choose from. Depending on your project scale and budget, you can decide on the best combinations for your business’s air handling requirements. Your confirmed capacity will then guide you regarding which AHU components should be installed.

Piping Mains and Branches

Commercial HVAC System Cost per Square Foot Piping Mains and Branches

Piping layouts for heating and cooling units employ various connections to, for example, the radiator, pressure valves, and heat sources. The twists and bends in pipe designs help complete the piping framework of your HVAC system, and the full distribution calculates your final cost.

Access points for air distribution into your building are another cost-driven factor. The size of your commercial building and the number of access points needed will affect your HVAC system budget. The overall cost will also depend on your HVAC’s coil type, size, and layout. If your HVAC system requires a long route to cool or heat the space that requires it then this will drive the cost of the HVAC system up. For instance, if you are on a lower floor of a building and you require additional cooling and the only space for a condensing unit is on the roof, then that added distance will required a more powerful unit and a longer route, thus increasing the cost per square foot for your commercial HVAC system.

Sheet Metal Ductwork

Commercial HVAC System Cost per Square Foot Sheet Metal Ductwork

Every commercial HVAC system uses sheet metal parts throughout its structural makeup. Your HVAC ductwork, air diffusers, exhaust fans, and grilles are some examples. Your total commercial HVAC system cost per square foot also considers this sheet metal coverage and application. The more the sheet metal elements in your HVAC system, the higher your final cost.

Ductwork Insulation

The next step after your sheet metal ductwork is the amount of insulation required to secure it at strategic points. This facilitates smooth operations in colder HVAC climates, allowing your ductworks to withstand the drop in temperatures. Cost estimates in this case are generally based on a proportion of the piping and ductwork layout. Considering the location of your commercial premises, the final HVAC insulation cost will differ.

Green Factors

Commercial HVAC System Cost per Square Foot Green Factors

LEED-certified HVAC systems, sustainable machines, and energy-efficient heating/cooling appliances take up a separate portion of your budget pie. This is because your technical team will first need to identify compatibility areas before your business HVAC system can go green. Various infrastructural upgrades and new appliances will need to be planned. These ensure smooth transitions towards your sustainable expectations – and it is a great chance to save up on utilities in the long run.

Miscellaneous Factors for Commercial HVAC System Cost per Square Foot

Factors like the commercial HVAC brand you choose will affect your total cost per square foot. This is because brands offer their own packages and solutions for their clients. Your HVAC requirements will demand custom installation, and you might as well enlist the company’s help for future maintenance. Your business operations create another perspective. They decide your HVAC scope and implementation timelines, giving you an idea about the start and end points.

Other cost-driven factors in the equation include the size of your building, labor and installation charges, the types of HVAC units you wish to install, and last but not least the HVAC controls that you select can dramatically influence your commercial HVAC system cost per square foot. HVAC controls can be limited to a local t-stat provided with each piece of equipment that can controlled by your office occupants, or it can be as robust as a custom master Building Management System (BMS) that can map and track every single component of the HVAC system from a remote location. The range of costs for these system is extraordinary, so pay special attention to what you are signing up for and look at all of your cost options (and the price associated with it) before you make a final selection. It would be nice to be able to control any thermostat in your building from your iPhone but you need to decide what it’s worth to you!

A Rough Estimate – Commercial HVAC System Cost per Square Foot

You can get various approximations from your chosen pool of commercial HVAC providers. The actual cost per square foot clearly depends on your business’s specific objectives for improved indoor air quality – as well as the factors discussed above. Here is a general guide to a commercial HVAC system cost per square foot, and you can expect discrepancies considering your individual project scale.

  • Recreational commercial buildings include gyms, basketball and tennis courts, golf ranges, ice skating rinks, swimming pools, etc. Any building that welcomes sporting and recreational pursuits makes a recreational center. For such a commercial building, the HVAC system cost per square foot can be $22 to $27. This typically includes rooftop units (RTU’s) and has a need to bring in a large amount of fresh air to meet ventilation requirement.
  • Small offices usually install 2-pipe HVAC systems that alternate the heating and cooling aspects in the same pipe – depending on your seasonal needs. Such 2-pipe commercial HVAC systems may cost around $20 to $28 per square foot.
  • Larger offices, on the other hand, might employ the larger 4-pipe HVAC distribution. This uses separate pipes for the system’s hot and chilled water networks. The HVAC cost per square foot in this case would be around $28 to $33.

Commercial HVAC Cost Estimation Software For Professionals

If you are a professional HVAC contractor, you can use various software tools to create more accurate, itemized quotes for your clients. These tools allow businesses to streamline their bidding process and have a confident chance of winning a project. Estimations for a commercial HVAC system cost per square foot are usually the combined result of all the individual piping, ductwork, sheet metal, and insulation costs. So, a good estimation software should target these interests in one authentic, real-time, and error-free system. Here are some examples of HVAC cost estimation software tools you can use to maximize your potential in the HVAC industry.

FastEST, Inc.

FastEST is an award-winning estimating and takeoff platform used by professional contractors. It focuses on different HVAC, mechanical, plumbing, insulation, sheet metal, and ductwork solutions. There are 3 specific software tools you can use: FastPIPE, FastDUCT, and FastWRAP. They offer contractor-ready features like on-screen digitizers, job-specific material pricing, adjustable labor rates, auto-connect piping, and Microsoft Excel compatibility.

FastPIPE is a mechanical estimating software used by commercial and industrial contractors. It helps you create reliable quotes for HVAC piping and other mechanical needs. The software relies on real-time material and labor costs. Its extensive database includes top manufacturers of HVAC fittings, piping, valves, and other fixtures, so you can generate updated commercial HVAC system costs. FastPIPE also has built-in, editable HVAC assemblies for boilers, VRF systems, gas connections, chillers, coils, pumps, etc. that can be presented based on square footage.

FastDUCT is a commercial HVAC estimating software designed for commercial/industrial sheet metal and ductwork contractors. You can create takeoffs and reports for sheet metal, HVAC equipment, and rectangular/round/oval ductwork.

The tool allows you to take data for different HVAC components and accessories to factor into the final costs. Apart from calculating the commercial HVAC system cost per square foot, you can also generate current material costs and labor hours. Both FastPIPE and FastDUCT work as an integrated platform to make quick and accurate HVAC quotes.

FastWRAP is an insulation estimating software designed for commercial mechanical insulation contractors. It is a comprehensive tool that meets all the estimation needs for mechanical, plumbing, industrial piping, HVAC duct, HVAC piping, etc. You can use it to calculate square feet and other costs instantly based on material pricing and labor hours. These labor hours are divided into piping and duct, so you can always choose the most relevant models for your business.

Procore’s Esticom

Esticom is a cloud-based HVAC estimation software, used popularly by HVAC contractors. The user-friendly online platform helps you with bid management, takeoffs, and HVAC estimations all in one place. This eliminates the need to switch back and forth between Excel sheets and other documents, as everything you require gets synchronized online. Esticom simply frees up time and effort that you can invest in your actual work. It generates accurate quotes to make your bid stand out and boost your chances of winning a project.

The tool offers features like ductwork measurement, fittings placement, drop distances, material database, labor charges, material prices, and many more. It is a smart way to represent your business professionally using client-conscious numbers that are reasonable, effective, and updated. Esticom also lets you collaborate online with your teams, vendors, and customers, which streamlines communication and approval between all the members.

Commercial HVAC System Cost per Square Foot – Conclusion

Once you are sure that a new commercial HVAC system will pay for itself down the road, it is time to consult with professional companies. They will guide you regarding core features like cooling towers, rooftop units, building permits, etc. Also, it is the perfect opportunity to install automation technologies for remote management. They help streamline HVAC controls for buildings like university campuses, hospitals, and offices. Regardless of your project scope, it is important to ask your HVAC company for a detailed breakdown of costs. It gives you a full insight into where your investment will go – and allows you to redirect your money towards better priorities.

By planning a smart maintenance follow-up, you can add valuable years to your HVAC system’s lifespan. Such preventive measures keep an eye on the ongoing needs of your HVAC network. They give your installations a “stitch in time” to save you the hassle of expensive system breakdowns. Collaborations with qualified specialists are a good way to go. Your project complexity will drive the costs, but it is the professional support of a reliable team that will bring you happy returns over the years!

Mobile Whiteboards

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If you teach, give presentations to business associates, or speak at conferences then you are well aware of the value of a high quality whiteboard. The best feature in a whiteboard is that it can go from a blank slate to full of ideas with some markers and then back to a clean blank slate by a simple wipe of a cloth. But the question arises: what would you do if you have to give presentations in different rooms, buildings or even cities?

If you are unknown of the “whiteboard” situation at your next presentation’s location, or if you like to “mix it up” at your school or office and hold meeting in different locations on occasion, then that is where mobile whiteboards come in handy by providing you the ease of taking it along with you wherever you want. These whiteboards are a bit expensive as compared to the non-mobile and hang on the wall variety. They vary greatly from board to board and you should know what to concentrate on when buying a mobile whiteboard so that it can last long. If you are planning to buy them, you can consider the following options:

Maxtek Mobile Dry Erase Board

Maxtek Mobile Dry Erase Board

This Maxtek Mobile Dry Erase Whiteboard is a useful investment for your office, classrooms, and any other similar setting. This mobile whiteboard consists of a rounded base and is equipped with five lockable wheels. Its unique design makes it a stable, safe, and portable whiteboard allowing it to be moved around easily with little effort. Moreover, it can also be adjusted according to your height from 63-78.5 inches. It comes in a size of 40 x 28 inches which provides sufficient space for jotting down ideas and notes. The whiteboard is made from higher-grade steel making it a strong product that is fit for all sorts of writing and drawing purposes. It comes with a mountable flip chart paper pad which contains 25 sheets. It has a magnetic surface that allows you to pin memos and flyers to it easily.

Offex Mobile Magnetic Whiteboard

Offex Mobile Magnetic Whiteboard

The 72 x 40 inches Offex Mobile Magnetic Whiteboard is a double-sided board that flips over and offers twice the writing surface area. This offers you ample area for comprehensive presentations and idea sessions. It is equipped with brakes at its bottom that can be simply pressed for turning and securing the whiteboard. It also features painted magnetic steel which resists streaking. This mobile whiteboard comes with 4 casters and 2 locking brakes. Its magnetic surface offers users to present papers or posters. It should be kept in mind that this size is a little bulkier than the other whiteboards on this list, however, this high-quality mobile whiteboard can outweigh this consideration and can be an excellent choice for any of your settings.

Dapper Display Magnetic Portable Whiteboard

Dapper Display Magnetic Portable Whiteboard

This Dapper Display Magnetic Portable Whiteboard feature stain-resistant technology that provides easy write and wipe experience for users. It includes a complete bonus kit which includes four marker pens, one magnetic eraser, a blue magnetic ruler, a long marker holding tray, and twelve round magnets that allow you to start using your whiteboard right away. It comes with ultimate padding protection to ensure the undamaged shipping of whiteboards. Moreover, you can easily remove the legs of this 3 x 4 inches whiteboard for mounting on the wall either horizontally or vertically with four corner screws. This mobile whiteboard is a great choice for taking notes and teaching effectively in offices, training sessions, schools, camps, or outdoor activities.

Superior Essentials Mobile Dry Erase Magnetic Whiteboard

Superior Essentials Mobile Dry Erase Magnetic Whiteboard

This Superior Essentials Mobile Dry Erase Magnetic Whiteboard is a perfect choice for homeschooling parents or any office presenter. It is a double-sided board that offers twice a writing surface. It comes with an easy reverse feature that allows you to flip it easily by just pressing a button and the whiteboard locks into that place. This white board comes in a size of 47 x 36 inches. Its frame and pen tray are constructed from high-quality aluminum. The stand is made from high-quality iron with a protective coating for rust. Moreover, this unit is equipped with locking wheels along with 2 inches caster wheels that offer easy rolling and help you in moving the board where you like. It comes with all required hardware and assembly instructions which are clearly written.

Flybold Mobile Whiteboard

Flybold Mobile Whiteboard

Flybold Mobile Whiteboard is a double-sided 48 x 36 inches whiteboard that comes with an adjustable writing angle along with a wall-mount option. It features a stain-resistant surface and smooth rubber wheels for easily moving around where you like. It comes with all the necessary accessories such as a magnetic eraser, a magnetic ruler, six gridding tapes, a detachable tray, and twenty-four push pin magnets. This whiteboard has four pre-fabricated holes to take the frame off the stand and easily mount it on the wall either horizontally or vertically. Flybold Mobile Whiteboard is excellent for any settings like offices, schools, homes, classrooms, etc. It consists of high-quality assembly hardware and comes in protective packaging to avoid any dent or damage. 

Maxtek Glass Mobile Whiteboard

Maxtek Glass Mobile Whiteboard

This Maxtek Glass Mobile Whiteboard is 40 x 28 inches in size and comes with a smooth long-lasting glass surface which is ideal for dry erase markers. It is easy to clean with any dry eraser and is resistant to any stains, scratches or dents. It is equipped with five universal wheels and has a rounded base that allows easy moving. Moreover, it has casters for locking brakes that make it safe and secure for kids.  This Maxtek Glass Mobile Whiteboard comes two steel flip chart hooks that can be used to hang small presentation materials and a transparent marker tray to place markers. Its height can be easily adjusted from 63-78.5 inches according to your ease. In addition to this, this unit comes with three erase pens, one magnetic eraser, and two neodymium magnets. These neodymium magnets help to attach papers to the magnetic glass surface because this cannot be done by normal magnets. Lastly, these mobile whiteboards are shipped in multi-layer padded boxes that provide the maximum protection against dents or damage.