Understanding The Cost Of An Office Space Build-Out

When searching for a commercial building or office space to lease, you may not find exactly what you had in mind when you started off. With that said, there are ways to take commercial office buildings and turn them into what you had envisioned in the first place, with the landlord’s permission, of course. This can occur in the form of an office build-out. An office build-out entails taking a current commercial establishment and tailoring it to suit the needs of your company. The following will help you to understand more about the office build-out and calculate how much such an adjustment will cost.

Why Office Tenants Need an Office Build-Out

One might think that when you lease an office space that you take the office space as is and are not able to alter the space in any way. This is often not the case. Many commercial tenants lease office space on the condition that certain alterations are made to the premises prior to or while they are leasing the space. These tenants often need something known as a build-out, where the office space is expanded upon and altered to suit their needs. This may be so that it can suit their specific industry needs or because it simply needs to be larger or sectioned differently.

How Much an Office Build-Out Costs

An office build-out will vary in cost but there are general estimates which are common with today’s commercial office space construction. For example, if you are interested in leasing office space and need a partial build-out for something such as paint and carpet, the current rate for both of these updates is approximately $8.00/sf. On the other hand, if you require a full build-out, the price per square foot will be in the general vicinity of $30-$40/sf.

Who Pays For the Office Build-Out?

Many times the landlord will pay for the build-out costs. This is especially the case when the lease term is for three years or more. For those instances when the landlord will allow the build-out to occur but refuses to pay for the costs, the tenant may pay for the costs on their own or ask that the rent rate be reduced for a certain amount. These build-out costs and requests for such alterations are often done during the negotiation stages of the office space lease process. One way to ensure that your bargaining power is the best that it can be is to have a tenant representative alongside of you when you meet with your landlord to discuss the build-out options available to you and see if the landlord will contribute to these endeavors.

An office build-out provides commercial office space tenants with a beneficial way to get the office space they want with the amenities and space they desire. Many landlords in the commercial arena are open to build-out negotiations and know that it is a good way to draw tenants in and have them lease their premises as opposed to going elsewhere. If you are looking to acquire an office space lease with build-out potential, bring along a tenant representative to ensure that the negotiations go as well as they should.