Who Pays for the Commercial Build-Out – Owner or Tenant?

Whether you are the owner of an income-producing commercial property or someone looking to lease space for your business, one of the questions that inevitably comes up is who foots the bill for the commercial build-out. The answer lies in what the owner chooses to do and what is decided upon during negotiations. Let’s look at this from both sides of the fence to consider what factors come into play during planning for a commercial build-out.

paying for the commercial build-out

  • Property Owners – As a property owner, you have the choice to leave a space as it is, either just framed out or as it was left by the last tenant or work with the tenant to build a space that’s ready for them to move in. You will be able to have full control over the process if you handle it, but you’ll also take on full responsibility. You must also be willing to take into consideration the tenant’s input, so they don’t end up cancelling the contract. Alternatively, you can put the tenant in charge of planning, doing, and paying for the commercial build-out while establishing any limitations or expectations through the lease agreement.
  • Tenants – As a tenant, taking time during lease negotiations to address commercial build-out responsibilities and costs is important. You should also consider the length of your lease agreement so you can gain the most benefit from the commercial build-out. For example, you wouldn’t want to have to pay several thousand dollars to convert a space if you have only a short-term lease with no options to renew.

Whether you are a property owner or a tenant ready to get started with a commercial build-out, give us a call at Redwood Homes Inc. Don’t let our name fool you as we are also very experienced with commercial renovations, including retail renovations, office remodeling, and dental office remodeling. Call on us today to discuss your project and get a quote.