Questions to Ask Before Leasing: 3/10
Over the next few weeks, we will be adding to our series of helpful tips for businesses starting to look into leasing. This post is the third of 10 on the essential questions you should ask before signing an office lease.
This Week’s Question:
What is TI and what does it cover? What is included in the building’s “standard” build-out.
When you begin the process of leasing your new space, you may wonder what the next steps will be to get your space to look exactly as you’d like it to.
“TI” stands for tenant improvement and is what the landlord will pay, at no cost, to build out the suite for you. “Build out” is how your office space will be designed to fit your individual business needs. There are specific items that are considered industry standard build-out items, including, drywall, painting, doors, flooring, lighting, HVAC, ceiling and electrical components. It’s important that you know what “standard” includes and what the associated costs of upgrading are before you lease. Examples of upgrades include glass doors, parabolic lighting, keyless entry, carpet borders, plumbing for kitchen area, additional electrical, phone/data wiring, carpet borders, alternate flooring, and upgraded ceiling tiles.
Always be sure you have a fully priced proposal for the layout itself with all of your changes from the original design. The detailed proposal will let you know if the building allowance offered by the landlord will cover all of the changes you want, as well as determine any out-of-pocket expenses for the floor plan. Any additional charges for the suite design are typically due at signing, or they will be amortized through the lease term adding more cost, ultimately affecting your bottom line. You also need to find out how flexible your Landlord is with outstanding balances from construction. Ask the landlord if they offer any “turn-key suites.” “Turn-key suites” include all the build-out expenses required to get the space ready for your business, drastically reducing your overall cost.
“Turn-key” suites are great for reducing cost, but not necessarily for fulfilling all of your needs.
Stay tuned for next week’s feature on Rentable Space v. Usable Space!