Lease Consultant -- Remodel Space

Construction is almost always required to customize office space. The length of a construction project is usually underestimated. Creating a timeline is key to guiding you through the entire process of designing and building out space. Although all project durations are dependant on the area of the space, consider the rule of thumb that a "typical" project takes about seven months, but may range anywhere from 4-12... months for completion.

We recommend starting your leasing process a year before your current lease expires. This will allow time for extensive customization of your space.

Remodeling Timeline

If you are building out space that is over 10,000 square feet, it is cost-effective to employ a construction manager or a general contractor to supervise the build-out process. The project manager will develop a realistic timeline and oversee all construction matters. Build-out for space over 10,000 square feet often takes between five and seven months.

Under 10,000 square feet, the construction process for space usually takes between three and five months. This is not an option for many small tenants who cannot afford to pay rent on two properties while one is being built out. Many small tenants try to find a space that allows them to move in "as-is". These tenants should be aware of hidden costs in what seems like small construction modifications. Remember that the building's condition define your options. For example, once a wall is moved, you are creating an aesthetic expense by needing to carpet and paint. Additional considerations include electrical outlets, lighting and ventilation.

Remodeling Costs

An effective way to hire a contractor is to obtain recommendations from your advisor and architect. Once you have a selection of reputable contractors and a preliminary construction plan, you should issue a request for a proposal (RFP) to the contractors. It is important to ask how many jobs a contractor usually works on at one time, and how many he expects to have at the time you will start.

The most unpredictable aspect of the construction process is project timing. Expect some delays specifically due to the ordering of materials and the gathering of building permits. Below is a sample of costs related to this process.

Hard Costs
  Soft Costs
HVAC   Financing Costs (under certain circumstances)
Electrical   Building Permit
Telecommunication   Consultant Fees
Elevators   (i.e. architect, engineer, project management)
Light Fixtures    

Budgeted Cost/PSF
Hard Costs $35.00 $65.00
Soft Costs 4.30 6.90
General Conditions 3.50 5.85
General Liability Insurance 0.53 1.63
Change Orders 1.75 6.50

    Subtotal $45.08 $85.88

During the lease negotiation process, a cash allowance is negotiated with the landlord for construction costs. The landlord is only interested in paying for the hard costs, or the costs that improve the premises physically. It is common for a landlord to limit the soft costs to less than 10% of the cash allowance. The section of the lease that outlines the cash allowances for construction is called a workletter.