Feb 25, 2014

Managing a Timeline for Tenant Improvements

By Don Catalano



A tenant improvement project is both exciting and harrying. The most challenging part is getting the space negotiated, designed, permitted and built before you need to move out of your old space. The key to managing the process is to get an early start.

Preparing to Lease

In a perfect world, your company would have at least six months to get your tenant improvement project completed. This requires looking for space at least nine months before the move date, and to start preparing before that.

From 12 months or more before your move, you should research markets and buildings. That is the best time to figure out if you want to move and where. You can research occupancy costs, compare them to what you're spending in your current space and find a tenant representative if you don't already have one.

From seven to nine months, it's time to start getting serious about finding space. When you negotiate, pay careful attention to the tenant improvement allowance. $5 of TI today is worth more than $1 of rent reduction per year on a five-year lease.

Once you go under LOI, it's time to build a team. If you don't already have professionals in place, find an architect or space planner. While some large landlords will require you to use their construction companies, it's also appropriate to start interviewing contractors so that you are ready to go. Ensure that the general contractor you choose has the necessary relationships and expertise to handle any additional advance skills that you need to include on your construction team.


After the Signing

No later than seven months from your move-in date, it's important to get your architect to draw up plans. In fact, he can start on the process once you're in negotiations if you're relatively sure of which space you will take. The sooner you can get plans drawn up, the sooner you can begin the process of pulling permits. If you get everything started seven months before your move date, you should be able to start demolition and construction five months prior to the move.

The construction process will largely be governed by the schedule that your contractor sets up based on the tenant improvement plans that your architect provides. As long as you do not submit changes while the project is in process, you will be able to hold the contractor to the schedule.

Done right, the schedule will have the construction substantially finished one month before your move date. This should include finishing work like painting and carpet installation as well as both low- and high-voltage wiring.


The Last Month

The last month lets you work on three things at once:

  1. Carefully inspect your space to build a punch list of items that need more work. This way, you can get the tenant improvement work perfect before you move into the space, letting the construction crew do their job without having to worry about interrupting your employees.

  2. Move in your new furniture, fixtures and equipment. As a part of this process, you will want to test your new telecommunications system and network to ensure that everything is installed properly.

  3. Finally preparing for the move by notifying clients, filing change of address forms and putting switchover procedures in place.

With some careful timing, the move to your new space should go without a hitch.


Here are some other great Commercial Tenant Improvement articles:

5 Ways to Stretch Your Tenant Improvement Allowance

Understanding Tenant Improvement Negotiations

Tenant Improvement Negotiation Strategies


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Don Catalano

Don Catalano