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Architectural Design Process

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I would like to think that the real estate and development world revolves around construction, but as I mentioned in my post about the commercial construction process, each construction project, whether it is a new (ground up) building, an addition, or a remodel, has to go through an architectural design phase before it goes to the construction phase.  In this post I am going to try and walk you through the architectural design process from a client’s or owner’s perspective.  Since I live in the commercial construction world this architectural design process description will be geared toward commercial architectural design for tenant buildouts or remodels, but by all means if you change words such as “architect” with “your spouse” and “conference room” with “family room” I think you can probably draw the parallels between the two!  Generally (if your house is not not a multi-million dollar custom house) the design process will combine steps or go a lot faster in the residential world so it will feel a little different but it’s pretty much the same process!

Before I begin with the list, I am going to throw out a little tidbit that may save a little time if you are really just looking for a general overview of the design process.  Architects are a little bit like lawyers in how they charge for their services.  Everything is based on how much time they think they are going to spend on a phase.  Everything is about time.  They don’t sell products, they don’t sell software, they create a design and other than a nice hefty bill from Autodesk for their AutoCAD or Rveit software, they really aren’t buying products to pass through to you as the client.  Sure they usually hire consultants to assist with specialized designs but their consultants are all about time as well. 

So with that being said, if you want to save a bunch of time and NOT have to read this article, the architectural design process includes creating very broad design information at the beginning, in order to come up with a general design idea for the space or building that you are looking for, and each subsequent step gets more detailed, and agreed upon, until the design gets to the point where it has enough information in it for a general contractor or construction manager to take it and build it.  

The reason that it’s done this way is because of time.  If you go too far down the road, and spend hours and hours developing details, and then a client figures out that they want to change the general design, then the architectural firm just wasted many, many hours’ worth of time drawing the wrong details, and in the design world that means they wasted a lot of dollars. 

Here is a summary list of the architectural design process:

1. Choose an Architect

2. Space Planning

3. Schematic Design

4. Design Development

5. Construction Documents

6. Construction Administration

1. Choose an Architect

In my opinion choosing an architect is one of the most important steps for you if you are an owner or a client looking to start a construction project.  I have been saying this a lot lately around my office but a good (or a bad) architect can really determine whether a project is a success for a client or contractor.  Architectural firms, even more than contracting, should be chosen based on qualifications over price, every time.  Now, I know that there is always some sticker shock involved in getting pricing for architectural services, possibly before you have even picked a piece of land, or before you have chosen a space to lease.  However, the potential consequences (monetarily and in terms of peace of mind) of hiring an architectural firm without the right experience or qualifications will far outweigh the upfront costs of an architectural firm.

Now, I am not saying to just go out and hire the most expensive/robust firm that you can find.  I have actually seen both situations occur when sometimes a firm didn’t quite have the experience or the manpower to handle a project, but I have also had an experience where an architecture firm overdesigned a project.  Then they had the audacity to request for more money to re-design everything to get it back under budget!

So what’s the secret formula in choosing an architect?  I don’t have it but here are a few tips to follow from my experience to get you down the right path:

A. Architectural Style

In my jaded and “seasoned” experience, I have noticed that each architect has their own style.  They have climbed their way up and/or started their firm by finding a good style that they like, and if they are designing within their element then they are performing their best work.  It’s not a bad thing, but I know if I hire design firm “Z” I know that they have tendency to incorporate a lot of interior glazing, light wood (clear maple) colors, anodized aluminum, white marble or ceramic tile, and carpet tiles with blue coloring in most of their designs, or Design Firm “A” likes dark wood, gray tile, light ceilings, etc..  They CAN change it but have a natural tendency to pick these types of finishes in their designs, if left the creative freedom to do so. 

What does this mean for you? 

Look at each architectural firm’s portfolio.  If you love what they have done in the past, then chances are you are going to love what they do for your project.  The more you are on the same page as an architect from the start the better chance you have of being on the same page when you start up on your project’s design!

B. Project Type

Another thing you do have to confirm is whether a firm has designed something similar to your project TYPE before.  For instance, if you are an advanced technology firm, and you want to build an office space out that you just leased to attract young new talent to your firm, don’t hire an architect who specializes in big box retail development, or restoring historical building (unless they designed a cool new office inside that historical building).  Architectural firms have their own specialties and it’s hard to predict what challenges may occur on a project but when the firm has done numerous similar designs before usually they are a little more equipped to handle challenges when they have “been there” and “done that” before!

C. Check References

Hiring an architectural firm is a lot like hiring an employee.  You are going to be spending the next few weeks, months, or sometimes years with them so it’s also worth checking how others’ experience was with them.  I have hired a lot of employees in the past and I lean more and more on references than anything else.  Sure, I weigh meeting a person and the interview pretty heavily, and they have to pass the “sniff” test before I even bother calling their references.  However, I have learned over the years that meeting and interviewing someone is really only half the story.  If a person (or a firm) has a blind spot, it’s nearly impossible to figure that out while you are talking with them.  Try and get references from other clients and try to get them for recent clients as well as similar clients with similar projects if you can.  When you call them please be sure and ask them questions that are important to you.  For instance, if you are really on a tight budget ask the client how the architect did managing construction costs for them by checking the finishes they are selecting, instead of just going all out with the design without concern for cost.  On the other side, if you really have a “vision” for your space and want to make sure that the architect listens to their clients well regarding the design of a space, check with previous clients about how well the firm listened to them and incorporated their ideas.  At the end of the day the right architectural firm for your project is very specific to your project and your company and you should really dig into an architectural firm’s past experiences and past projects before making a final decision.

D. Firm Size and Capabilities

This is most relevant if you are building a big project or a fast project, but thinking about the firm’s size, and capabilities is something you need to look into as well.  There are a lot of “one man” or “one woman” firms out there, and I honestly hire the “boutique” firms just as much as the bigger firms, but there is a time and a place for them.  If I know that A) I am building within their niche, B) the project I am building is not too much for them to handle, and C) they are not slammed with another project at the time then I am ALL about hiring a smaller firm to complete design for me on a design build project. 

However, if I am starting to get into a 5-million-dollar remodel of a science lab at a university, then sometime I may spring for a firm with a little more expertise and bandwidth.  This one is really just more of a gut feeling but it goes back a little bit to what the firm’s history looks like.  If they have completed similar projects in the past and left satisfied clients, then typically it’s a safe bet that they are going to be able to perform for you as well. 

What we are trying to avoid in this case is A) firms doing something for the first time ever, because there is always a learning curve in that case and you don’t want to be the person funding that, and B) finding out mid-stream that the firm can’t handle the work due to either workload or lack of expertise.  In that case then they have to look to send out pieces to another firm, or you may have to force them to give up the project to someone else.  Neither option is a good option. 

E. Cost

I listed this at the bottom on purpose, but cost is of course something to keep in mind when hiring an architectural firm.  It would be nice to hire the best, most capable, and the most established firm in town for all of your projects but some of the bigger firms around town really just have a minimal amount that they have to cover when they select projects to build.  When you are building a little $100,000 TI that a boutique architectural firm could handle it’s really difficult to justify spending 15% of your total budget on design alone.  My biggest tip for cost would be to just get multiple prices from qualified firms and see where they fall for your project.  At that point you can decide if it’s worth the extra cost to go to a firm that you feel is most qualified for your project.

Well that was a lot to talk about the architectural design process before I have even started talking about the actual design, but as I mentioned before, the architectural design firm selection process is something you can control the most and so it’s very important to do it right the first time!  After you have selected the right design firm then it’s time to work with them on starting the design for your space or your building!

2. Space Planning/Master Planning

Space planning or master planning if you are looking at a new building or campus, is step one in the architectural design process.  At this point in time information exchanged needs to stay really broad and really just focus on your needs as a client.  General information needs to be established such as how many people will be using the space, and how are they going to use it?  Number of people and how the space will be used can get translated into how much total SF is needed and what kind of rooms will be needed?  Again – speaking in terms of a standard office TI there are typically basic “office” needs that always need to be addressed including what kind of offices are you looking for?  Private? Open?  Workstations (i.e. the new word for “cubicles”)? 

After the number and size of “offices” is established then you will have to determine your space’s common areas. 

Office Common areas typically include (at a minimum):

  • Lobby
  • Break Rooms
  • Conference Rooms
  • Copy Room/Space
  • Restrooms

Other common areas/amenities, if you can afford it or desire them can include:

  • Training Room
  • Breakout Room
  • Game Area
  • Rooftop Patio
  • Bar
  • Breakfast Bar
  • Cigar Bar
  • Oxygen Bar
  • Yoga Room
  • Workout Room
  • Cafeteria
  • Prayer Room
  • Nursing/Lactation Room
  • Etc…

In terms of a tenant improvement project we sometimes see what is coined a “bubble plan” created in this circumstance because your needs as a client really do not yet depend on an actual space and the design will look more like a “Venn Diagram” to start.  Most of the time you should go through this design exercise BEFORE you start looking for spaces because it will actually help you define what you are looking for.  I went through this in more detail in another post titled Tenant Improvement Allowance and Tenant Improvement Costs but a great rule of thumb when looking for a new space for your company is to try and find out that requires as little modification as possible.  If you have gone through this preliminary space planning and know exactly what you are looking for then the more “boxes” you can check above the better the space is for you and your company!

3. Schematic Design

Schematic design usually starts after a couple things take place:

  1. You found a space (or piece of land in the case of ground of up building) and
  2. You have compiled your list of “needs” per above and you are ready to see how it lays out in the space.

Layout

The main point of the schematic design is to layout where and how your floor plan will look.  All of your needs above will have to be met in the space that you just found or are considering, and so the main floor plan is a big step in the process.  Office types, number of offices, location of the break room, conference rooms, restrooms, etc… will be established and hopefully you will get a really good idea of how the space will layout after this step. 

Finishes

At this point in the process walls will start to be laid out, room types will start to be laid out on a floor plan, and a narrative of the function of the space will start taking place.  A general feel of the finishes will be defined but finishes not yet picked out.  Material types should start getting selected, such as carpet or carpet tiles, ceramic tile or VCT tiles, etc…

Mechanical, Electrical, Plumbing (MEP) Systems

There may be a general idea and narrative that goes along with the MEP system at this time.  Much of the mechanical and plumbing will be driven by the existing systems (i.e. HVAC system, ducting or hydronic piping, plumbing lines, existing restroom and break room plumbing fixtures).  The narrative will start to address the intent of the design and the plan.  I like to think of it in terms of the space planning determined “what” you need and the schematic design starts to define “where” and “how” the rooms and the space are going to come together.

If you are looking at the architectural design process in terms of a new building that you are developing usually at this stage we will start to see a sheet of elevations or a nice 3d rendering that summarizes the look of the building.  Vital information will be finalized including the number of stories, general footprint, and use (residential, retail, commercial, etc..) of each floor in the building. A site plan will be drafted for review to discuss utilities (where they attach to public utilities), transportation in and out of the site, and general grading of the site. 

Budget

After the schematic design is established, then there is usually enough information established to develop a budget.  Some architectural firms have a “construction guru” who can assist in this matter, but normally I don’t usually see that person unless it’s one of the bigger firms in town.  Luckily, general contractors are usually more than happy to put a budget together at this time, especially for repeat clients, but even for new clients.  We like to do budgets at this time at our firm – W.E. O’Neil Construction – because A) it’s easy for our estimating/pre-con department to rip a fast budget and B) It allows us to become familiar with the project and space early on in the process, and C) it helps everybody avoid budget surprises early on in the process.  That helps everyone out, including the architectural firm and the client.  We always love to help with the process because we are usually pretty in tune with different finishes and MEP systems and can make suggestions to alter design without modifying performence in order to give a better value to the project.  Design changes at this time are easier for the architect to make so we find that they are usually pretty open to ideas this early in the process since it doesn’t really cause re-work for them on their overall design.

I will leave you with two points of caution if/when you decide to budget at this stage of the game:

  1. The budget is only as good as the design.

We try to fill in the gaps of the design as much as possible at this point, but if we are missing information at this point in the process then what we don’t know won’t make it in the budget, and sometimes that results in a higher cost down the road.  We try and accommodate for “unknowns” by increasing our contingency budgets based on how far along the drawings appear to be, but sometimes there is information that we should have but don’t.  For instance, if a mechanical system in a building is non-functional or underperforming and we are going to need to bring in brand new HVAC equipment, this can be a significant cost.  If the building is full of asbestos and we do not know about it, then that would be another example of an unknown cost.  Really any major assumptions that we have to make that don’t turn out to be true can be a point of risk for a project budget, so the more research that can be done up front by the client or the architect the better.  We try and be upfront as much as possible when creating these budget by creating a “qualifications and assumptions” document.  It’s really important to read that line by line if a general contractor produces that document to make sure they are not missing something.  If you get a budget with “qualifications” I would highly recommend reading through it and asking questions about it if you don’t understand.  As one statement or qualification could mean the difference between a lot of money.    

2. You will only get a few opportunities for a budget –

Unless you pay a general contractor for pre-construction or you have a really good relationship with a general contracting firm, you will really only get a few opportunities to get accurate pricing from them.  If you are using them to price every option in the book or using them to help you choose a location by pricing a half dozen different options, it’s going to get difficult for a general contractor to go back to the drawing board every time, especially if he is seeking help from subcontractors.  Try and at least establish a space that you like and 1 or 2 major options before you reach out to a general contractor.  Sure, we know that things change but if we (as a GC) get a sense that a potential client is not good at making decisions, or is still too early in the process to be getting budgets, then usually that does not turn out well during a construction project.

4. Design Development

This is where the architectural firms will start to spend most of their time.  After the schematic design is approved by the client then design development will start.  Since a lot of time is spent on design development the hope (from the architect’s perspective) is that they have received all of the critical “use of space” and “finish” information from the client and they are ready to rock and roll on creating their design.  I should mention at this time that sometimes this step gets merged with the “Construction Documents” stage.  If the tenant buildout or remodel is smaller or pretty straight forward, or if a client has performed similar type of work in the past with a contractor then sometimes the architect can skip this step or merge it with the construction documents.  Sometimes the information from the client is already there and a lot of GC’s who live in the tenant improvement world know standard construction details.  On the other side of the coin, we have seen some architects provide more of a “design development” set of drawings and call them “construction documents” and we have to try and extract information from them or assist them in creating critical details that we will need in order to build the space out.  That situation creates a bit of a bumpy road!

In the design development of a tenant finish or remodel I usually consider the following architectural pages to be the most important and the ones that the architectural will focus on the most at this point:

  • Architectural Floor Plan
  • Architectural Reflected Ceiling Plan (RCP)
  • Architectural Finish Plan and/or Matrix

In addition, at this point the architect should engage all of his or her consultants.  Those typically include the mechanical/plumbing and electrical engineers.  The architect usually needs a headstart so he can create all of the “backgrounds” (i.e. wall layout, ceiling layout) files for his consultants, but after they get a nice, accurate layout, they are usually quickly off to the races just after the architect.

The architectural floor plan is usually the first place to start:  the entire layout of the space that was agreed upon during the “schematic design” phase will start to get detailed out with most critical dimensions shown, and wall types called out.  The RCP and finishes plan (or matrix) follow behind it and usually have enough information in them during this stage where a client or general contractor can really figure out how big the rooms are, what the walls are made of, what the ceiling is made of, and what all of the finishes are.  What is usually lacking at this point are some details that will be critical for the construction of the space but usually not quite necessary for budgeting or for the client to be able to understand what it’s going to look like.

Budget

At the end of this stage I recommend getting a budget every time.  Typically at the end of design development architects are very close to sending a drawing into the city or ‘Authority Having Jurisdiction” for review in order to get a permit, so they are really locking in the design pretty well as soon as it gets to the AHJ office.  The architect has done a lot of work at this point but really the most relevant changes that can be made will be finish selections.  Most of the time this is when pricing is completed and a general contractor selection takes place because it takes a few weeks to get pricing back and waiting to receive a permit is usually a great time to wait to receive contractor pricing back.

An alternative to getting a budget at this time would be a discussion about “alternates” that can included in a bid set to the contractors.  This would allow the client a “fall back” design in case the project is going over budget.  The big risk at the end of this stage would be if the project is really over budget as the architect has already put in a lot of work and so if you had to pare down scope at all it will start to cause the architect more work and more time.  More time costs extra money, so it starts to become a frustrating situation for all parties involved!

5. Construction Documents

This is usually the “final” stage in design.  Hopefully at this point the client is very sure that they agree with everything that has been designed to date.  These documents are really just the “finishing touches” that are needed to comply with building department requirements and that are required for general contractors to be able to build the project.  Final dimensions are needed everywhere on the floor plan and reflected ceiling plan (RCP), and this is when the pages and pages of details, section views, and elevations are created in order to really finalize the design.

Usually at this point or in the Design Development stage a full set of “specifications” are included to set the full expectations of the project including full information on material selection, equipment, and even quality control on how everything need to be installed.  Between the drawings and specifications a contractor should have a really good idea of what is expected of him when he signs up to build the project.

Budget

In public projects or in some types of projects (when the timeline is not as much of an issues) the bidding process will start after the completion of the Construction Documents.  This is great for the general contractors as there is more information and less clarification is needed when they start building, but again it’s all about the time of time that you have.  If you can afford it (from a timing perspective) it’s the most straight forward method to price it at the end of the design process, but the big risk is as long as it comes under budget!

6. Construction Administration

In an ideal world this phase wouldn’t exist.  In the real world architects probably spend a lot more time in this phase than they would like to.  I believe that usually architects budget about 10% of their projects on “Construction Administration” but this is the stage where if the general contractor has any questions on the design of the project then the architectural firm commits to being available and engaged in the project throughout the construction until it is complete. 

The official “engagement” of an architect usually takes place in the form of the following activities during construction administration:

Submittal Review and Approval – Confirmation of all of the materials and equipment being installed on the project.

Requests for Information (RFI’s) – Response to official “questions” asked by the general contractor or construction manager.

Owner/Architect/Contractor Coordination Meetings (OAC’s) – regular coordination meetings (usually weekly) that help to maintain the flow of communication between the project team and get items resolved so the GC can continue progress.

Punchlist – A review of the completed project to do a final confirmation of construction quality and completeness

Closeout Documents Approval – Review and approval of final documentation including as-built plans, operation and maintenance manuals, warranties, and training as needed for client to operate new space.

Really the biggest point to construction administration is to confirm that the intent of the architect’s design is being met and that the client receives what they expect from the contractor in their project.  From my perspective it feels like some architects underestimate the time and energy this stage takes, and usually it’s the ones who didn’t spend enough time detailing out the drawings.  We, as a general contractor spend a lot of energy running quality control and double checking all of our work so we are not gun shy about doing complete submittal packages and writing RFI’s when clarifications are needed.  Although this stage is not a “main” stage of an architect we (and our clients) really depend on an architect to be responsive at this time in order to successfully build the project.

That is the architectural design process in a nutshell!  If I missed something please feel free to e-mail me or comment below! 

Commercial Construction Process

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Some clients who we start working with don’t fully understand the typical commercial construction process.  I don’t really blame them as when I was even interviewing for jobs in the construction industry (granted that was over 15 years ago and I was still in college) I didn’t actually know the difference between a design firm and a construction firm.  Guessing some of the firms that I interviewed with at the time were NOT impressed when I told them I didn’t care if I worked for an engineering firm or a general contractor:  i.e. please offer me a job I don’t care what I do!

So I am writing this post to give everyone a quick description of the commercial construction process.  Now, I like to write, so I am going to going into more detail about each step farther down in this article, but I am going to provide a simplified description of the process first and then describe the numerous steps that fall into each section of the commercial construction process farther down the.  There are also two methods of building a project, the traditional way of building (design-bid-build), and the “newer” way (design-build), and then many “hybrids” in-between:

A Brief Summary of the Traditional Commercial Construction Process

1. Design

2. Bid

3. Build

Design

The first step in the commercial construction process is design.  Traditionally someone who wants to build a new building, buildout a tenant space, or complete a remodel of their existing space will need to start with an architect.  The architect will sit down with the client, figure out what they need in terms of the use of their building or tenant space, and will take steps to work toward providing the client a final design that can be built by a construction company or general contractor.  After the design is finalized then the plans typically need to be submitted for permitting.  At the same time, the project can enter the “bidding” phase.

Bid

Now that the design is complete it is time for the project to be “bid”.  This is when one or multiple general contractors will review the design (we usually call them “Contract Documents” and they usually include at least plans and specifications) and prepare a proposal.  General Contractors can build the project with their own labor force but most commercial general contractors nowadays tend to hire out a lot of the labor to subcontractors.  Regardless of how they do it, we have to provide a “maximum price” that we can build the project for and then the client (sometimes with the assistance of the architect) will select who they want to build the project.

Build

Wow this process seems so simple when I write it down!  After a GC is selected then they sign up with the client, they procure all of the materials that are needed for the project, and when it makes sense to start they begin to install the materials onsite.  Keep in mind that before a general contractor can do anything onsite they typically have to have a building permit (and most of the time other permits) in place with the local jurisdiction.  This is typically the longest portion of the project and a lot of activities occur on a daily or weekly basis, so many times a general contractor will develop a detailed schedule to show the client how the project will progress, and most projects will have weekly meetings so everyone (client, architect, contractor) can coordinate questions that may come up along the process.

That is the process in a nutshell!  Let me know if you have any questions!

Tenant Improvement Allowance and Tenant Build Out Costs

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If you just recently leased a space for your business or are looking to lease a space for your business you may have come across the term “tenant improvement allowance” or “TI Allowance”.  I wrote this article to give you a little more information about the term and what to look out for when you are finalizing your lease with your landlord. 

First of all here is a definition of a tenant improvement:

Tenant improvements, also known as leasehold improvements, are the alterations a building owner makes to rental space as part of a lease agreement to configure the space for the needs of that particular tenant.

Here is the short and sweet definition of tenant improvement allowance:

A tenant improvement allowance (TA, TIA, TI allowance) is an agreement from the landlord to compensate the tenant for all or a portion of the funds required to construct the commercial space to meet the tenant’s needs.

Here is the long explanation of a TI Allowance:

When a landlord is leasing a space out they are typically either leasing out a new “core and shell” that has never previously been occupied by a tenant or a “2nd generation” space that has previously been occupied by a tenant.  A huge and sometimes unexpected cost for a tenant – whether the tenant is using the space as an office, retail space, restaurant space, or industrial shop, etc… (the list goes on) is the commercial build out of the space.  After you lease the space you are going to need to do SOMETHING in terms of a tenant improvement to the space to prepare it for your use.

That’s where the Tenant Improvement Allowance Comes In

Landlords want you as a tenant, and they know the build out of a space is expensive, so most of them offer a tenant allowance to help their tenants build the space after it is leased out.  Don’t get me wrong – you are ultimately paying for this tenant build out through a more expense lease rate.  However, landlords understand that it’s a difficult task to try and get financing or capital for a build out of a space that you are leasing and may potentially move out of at any given time.  The only company (other than yours) who will benefit from a newly build out space is the landlord, so they are most willing to put the cash up front to get your space built out, in lieu of a bank or financial institute.  The bank would need something else as “collateral” if you used financing to built out your tenant space since you don’t actually own any of the finishes or improvements within the landlord’s building.

How much Money is Needed for a Tenant Allowance or Tenant Improvement?

Some clients of ours looking a space to lease will sometimes ask me as a general contractor – how much money do I need for a tenant build out?  This question is always a tough one since it is so dependent on what the current space looks like and what you ultimately need the tenant space to look like before you move in.  If I gave you an answer without finding more about your space I would just making it up, so if you are really trying to find out how much it would be to build out your office or tenant space here are the 10 questions you will need to answer:

Existing Space

  1. Is the existing space a new core and shell or second generation?

A new core and shell space is going to be more predictable than a second generation.  Normally a new core and shell will hopefully have higher ceilings, better subfloor, and less “surprises” in general such as more modern MEP systems, high efficiency walls, and modern conveniences (i.e. elevator, access control, proper HVAC and ventilation, etc…

A second generation space may contain some challenges such as old, inefficient mechanical, electrical, and plumbing systems, depending on how old it is and how many different remodels have been done within the space.  On the other hand, if a second generation tenant space had previously been built out to a similar space that you are looking for, then there is definitely potential that you can save on construction costs if you are able to keep any piece of the original construction. 

2. What does the existing space look like?

When taking over an existing space we always run into what we typically call “unforeseen conditions”.  These are conditions they are not apparent at the time we start construction, but we can usually try and predict how much of it we believe we will experience based on the history and appearance of the tenant space.  We have run into everything “under the sun” when demolishing existing spaces to build out new offices.  However, there are typically some common things we run into that we keep an eye out for when walking potential spaces.  Some examples of “high dollar” items that would fall onto the tenant’s responsibility to “cure” could potentially include asbestos containing materials (ACM), lead based paint, outdated electrical systems or lighting systems that require replacement or repair, outdated mechanical or plumbing systems that require replacement or repair (e.g. a damaged sanity sewer line), an inadequate fire suppression system, outdated fire alarm system, or a sub-grade or slab that is not in good condition and requires repair before installing new flooring on top, etc… The final question is what do the finishes look like?  Is the space still sporting some shag carpet from the 70’s or does it have something you can live with for your own space?  Can you keep the break room and restrooms intact or does the sight of the existing rooms make you want to rip everything out and start anew?

3. What is included as “landlord work”, and what is included as “tenant improvement” work?  i.e. what is the landlord’s responsibility and what is your responsibility? 

This will come down to the “Landlord Responsibilities” Exhibit in a lease typically that defines everything.  The language in a lease can really either save or cost a lot of money depending on how it is written.  It would be tough to describe every aspect of tenant or landlord responsibilities to watch out for but some things to keep in mind would be what part of the electrical, plumbing, mechanical system is the landlord responsible for and what are you (as the tenant) responsible for?  Unrelated to the tenant buildout but important to note here is that the responsibility of all of the utilities, maintenance, and repair of the space will all be addressed in the lease as well and it is certainly something you should keep in mind while studying a potential lease.

4. Are you happy with the space as a whole or would you prefer to perform any structural modifications to make the space better for your company?

In some past projects I have really seen structural modifications be a “budget buster” before, so this is something that needs to be addressed as well.  Do you love the space but want a second stairwell added?  Or do you notice that some civil work will have to be done in the parking lot to fit enough cars?  Anything that is not related to “finishes” or mechanical, electrical, plumbing for your particular space is really going to start pushing your construction costs over the typical range for a tenant build out.  Cutting big holes open in an elevated slab or doing structural modifications for a rooftop deck are all costs that you would hopefully avoid if you are on a budget, because they are really going to cause an increase in construction costs even before we are installing finishes for the space.

Plans for Your New Space (Space Planning)

5. How many and what type of offices are you planning on building out?

Open offices are becoming increasingly popular nowadays, and one positive effect of the “open office” concept is that the buildout of the space is certainly less expensive than an office that has a number of private (drywall wall) offices throughout the space.  My basic rule of thumb for traditionally built private offices is to plan on adding around $200 per lineal foot of wall when you are installing new offices.  This does not even account for the mechanical and electrical effects of sub-dividing your space into numerous rooms.

6. Conference rooms?

Conference rooms tend to bump your construction costs a little more than a typical private off or standard open office buildout.  New conference rooms are increasingly adding teledata equipment, intricate audio/video systems, and the now standard new large flat screen TV’s for the space.  In addition, there are addition HVAC and lighting requirements for a conference room compared to a standard office so the number of conference rooms you are planning on adding to your space will definitely affect your office buildout price.   

7. Break rooms?

Similar to conference rooms, building out new break rooms in space will certainly increase your construction costs.  Plumbing is usually the trade that adds the most expense when adding break rooms.

8. Restrooms (in addition to any landlord provided RR’s)?

Restroom groups cost a higher price per square foot number than a standard office so

9. What level of finishes do you prefer?

This is the most common question that a tenant will need to answer for their new space.  Are you looking for high end finishes or are you Ok with standard “carpet and paint” scenarios.

10. What do you need in terms of furniture, fixtures, and equipment (FF&E)?

FFE is also something to keep in mind.  Are you bringing all of your existing furniture or planning of purchasing new, or when you saved money by creating offices do you now have to turn around and spend more money on workstations or furniture?  FFE is definitely something you are going to want to figure out when agreeing on your lease.

If you can answer these 10 questions above for a general contractor then they should be able to come up with a rough budget for you.  The landlord will typically offer up suggestions on how much a buildout will take but please just keep in mind that they are of course trying to finalize a lease for their space so it may be prudent to seek a second opinion.  If you are in the Denver, Los Angeles, Arizona, Nashville, or Chicago markets please feel free to contact me as we typically assist our clients in this quick pricing exercise as a free service, with the hopes that we can compete to win the project of course!

If you are NOT in one of those markets and really just want a rough idea of what everything would cost here are some good rough numbers to use.  Again, I have to use a disclaimer that these are standard prices for the Denver market, and every space can change depending on existing conditions. 

Very Simple Rule of Thumb for Office Build Out Costs:

A very simple and inexpensive buildout of an office or retail space will cost somewhere in the range of $40/square foot (SF) in the low range, to $200/SF in the high range. 

What will $40/SF buy in a tenant build?  This pricing assumes that you are building very few walls, your ceiling, lights, HVAC, plumbing are already in place for the most part, and you want to buy some new carpet and paint. 

What will $200/SF buy in a tenant build?  New lights, new ceiling, high end finishes, high end doors and hardware, glazing throughout, new rooms such as conference rooms, break rooms, and potentially some structural modification (think adding a new stairwell, etc…) as needed. 

I will write an article in the near future that goes deeper into what trades cost what price per square foot ($/SF) but hopefully this really rough numbers and questions to ask will start point you in the right direction.  Again Please feel free to reach out to me directly or enter a comment below with any specific comments or questions about your space. 

Thanks!

Dan