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When you lease a new office space, it's likely you will need to make some changes, additions, and/or renovations to make it your own - an office build out. You are about to finalize your lease and you've negotiated tenant improvements, so you can take on necessary projects. Your next steps will slightly differ depending on whether you are slated for a turn-key build out or you have agreed upon a stated dollar amount for tenant improvements. In a turnkey build out, you landlord funds the cost of improvements and typically oversees construction. When you have agreed on a stated dollar amount, most of the responsibility of the office build out renovations will fall on your shoulders.
Regardless of whether or not you have negotiated a turnkey office build out, the process is very similar. Below we broadly outline the office build out process so you know your next steps (also applies to your retail or industrial space as well).
The longer it takes to do your build out, the longer it takes for you to open your doors and start taking in revenue. One of the best ways to ensure your project gets done in a timely manner is to hire a project manager to oversee construction.
In a turnkey build out situation, it's likely your landlord will hire a project manager or has someone he or she normally uses. If you are overseeing renovations, you can save yourself time and money by paying a project manager and holding them to their estimated timeline for completion. Make sure to review several options and check references to ensure you get the right person for the job. If you clash with your project manager, it can wreak havoc on your completion timeline.
The value a project manager brings is the stuff you don't know that you don't know. A perfect example from a client of ours in California - they did not hire a project manager and the tenant that was leaving the premises booked the moving elevator for the whole weekend. The two tenants were not in communication and our client was not able to move operate from their new office on Monday morning.
The design phase will differ slightly based on the extent of the build out you need for your office space and whether you are starting with a shell or renovating and existing space. In a turnkey build out, you and your landlord will typically work together with an architect and/or designer to draft elements and a budget for each piece of your required build out.
In a standard build out, you will make decisions about design elements on your own. This includes things such as building or knocking down walls (including demising walls), adding or removing doors, and millwork. You also must plan for plumbing needs for all spaces including restrooms and break rooms. Other aspects of the design phase will include electrical wiring, outlets, and circuits, and finishing touches such as paint, flooring, and any built in counters or reception areas. During the design phase you will also plan for furniture and decor.
Your project manager will put all of the pieces together - for example, demo comes before everything, carpeting comes before putting up new walls, etc.
Once you've finalized design plans and have a vision for your build out, you and/or your landlord will need to get bids from contractors for the work that needs to be completed.
You shouldn't choose a contractor on price alone. The lowest bid doesn't necessarily equate to the best contractor.
Pay special attention to what is included in the bid, and even more attention to what isn't included in the bid.
It's important to stay on budget, and the last thing you want is a contractor who comes to you in the middle of a project for more money. You have to allow for potential overages, but a contractor who doesn't offer much detail in his or her bid might play fast and loose with your money.
Some unforeseen costs which might surprise you include the cost of wiring for internet and other technology and the cost to install furniture. You also need to make sure you are comparing apples to apples, so make sure you explain your needs and wants in the same fashion to all parties who submit bids.
Once you've chosen a general contractor for your project and have finalized your plans, you need to obtain building permits from the city and/or county where you are located.
Getting your permit(s) can take some time, so you want to take this step as soon as possible. It's likely your general contractor will get the permit on your behalf, but you can also get it yourself.
Depending on your location, obtaining a building permit might take an hour, a day, a week, or longer. It's fair to assume that bigger projects will take much longer for approval than small build outs. The process typically requires filing an application which includes the building plan for your office or retail space.
Building plans are typically formal blueprints which show city/town your exact plan for construction. Your local municipality will review your application and make sure your plan complies with local and state building codes. Getting your building permits will eventually lead to getting your certificate of occupancy, which is required before you open your doors.
We reviewed a lease for an office user in Florida that did not know they had to apply for building permits to construct one office within their space, and they also had to get the approval of their sublandlord as well as their head landlord. They were ready to build the office for a new executive, only to find out that they had to wait another 6 weeks to get the approvals.
After construction begins many business owners might be tempted to back away from the office build out a bit.
If you've carefully chosen a project manager and general contractor, you can back away a bit and let the professionals do their job. Yet, you should never be completely hands-off. It's in your best interest to maintain regular communication with your project manager to ensure the project stays on track, in terms of time and budget.
You also want to make sure that your build out is being completed according to the design you agreed upon. Your project manager will schedule mandatory inspections as the project proceeds. You should definitely make yourself available on these days.
This way you will have a complete picture of any changes or additions to your plan, especially those which might cost you additional money.
When your contractor finishes construction and your build out has passed all necessary inspections, it's your turn to line up all the necessary finishing touches.
This includes hooking up internet, cable, and/or phone. Additionally, you will have to set up delivery for office furniture or shelves and racks for retail stores, as well as any supplies you might need before you open your door. Finishing touches also include scheduling delivery of appliances, computer equipment, and any other electronic items your business might need.