I’m amazed how fast tenant improvements have been going. These are pictures of my office 2.5 weeks after we broke ground. It looks like everything will be finished by the end of January.
When overseeing improvements, I heard that you should visit the site frequently. You’ll most likely find mistakes or change your mind about a couple things as you go along. Obviously, it will be easier to rectify these things if you address it earlier. I, myself, ended up changing a few electrical and data outlet locations. Having said that, you probably shouldn’t be there all the time breathing down everyone’s necks and micromanaging workers. That’s the job for the on site supervisor.
I thought I would have been stopping by once or twice a week, but I’m finding myself at my office almost everyday. However, I like to check the place out after hours when everyone’s gone. Mainly, I go to pick up my mail, and just to see how everything looks. Sometimes, I do like to take my sweet time performing a walkthrough. If I find any issues, I would just bring it up the next day to the supervisor over the phone. So far, I haven’t found any gross errors.
It is indeed pretty cool to see your vision come to fruition. Definitely excited. Definitely happy. Definitely terrified.
Howie’s addendum: as I’ve mentioned, I found a psychologist’s office where the rooms were the exact correct size. This saved me the hassles of time and money for the buildout. I got a initial $17,000 tenant improvement allowance. One property I looked at was formerly a primary MDs office and irritatingly enough the rooms were just a little too small, so I would’ve had to move around walls. They were gonna give me a $50,000 TI allowance, but thankfully the property that became my office finally became available (the neurosurgeons that had signed a LOI backed out).
Your TI allowance is “baked into” (amortized) into your rent, but you don’t have to front the money which is good for a startup. The longer the lease, the more you’ll get. I’ve heard estimates that they cost about $80-85/sq ft for a buildout from a shell. Moving the walls on the property described above isn’t a full buildout so my TIs would’ve covered it, but a property I looked at recently offered $60, meaning that I would’ve been on the hook for the remaining $20-25/ sq ft (about $40,000).
TIs always take longer than expected and cost more, so constantly check up on what is going on and communicate the urgency with the project manager and contractor. Sometimes it’s the city and their inspectors and permits that are the holdup. Try to have a clause in your contract that imposes financial penalties on the landlord if your suite isn’t available by a certain date.
This is also a reminder to pick the right space- location is key, but you want to get a place that’s big enough and you won’t grow out of in several years, while at the same time balancing not getting something too big.