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What to Know About Commercial Tenant Improvement Projects

If you're renting a commercial space for your business, you may have to contend with some things that aren't up to your tastes or standards. Sometimes, the amenities aren't up to par, and some facilities could be outdated. Here, a great option would be to embark on a commercial tenant improvement project. Let's see what this entails, and how you can benefit from it.

What is a commercial tenant improvement project?

Commercial tenant projects, also referred to as commercial leasehold improvements, happen when the landlord offers discounted rent or payments to the tenant in exchange for property improvements carried out by the latter.

It occurs in two stages. First, either one of the tenants or landlord can hire contractors to carry out the upgrade. Thereafter, the landlord pays for the repairs by reimbursing the tenant, or offering the tenant reduced rent.

What are some examples of commercial tenant improvement projects?

Different businesses have different requirements. A tenant improvement project can allow you to tweak your leasing space to fit your precise needs.

For instance, you might want to partition the space to add multiple offices, an extra bathroom, kitchenette or a meeting room. These are all transformational initiatives.

Additionally, you should consider accessories like lighting, special tables, chairs and shelves, seeing as they aren't covered in the tenant improvement allowance.

The right construction company can help you to ensure that your chosen design is comfortable, professional and functional.

Benefits of commercial tenant improvement projects

Here are some positives you can expect from a commercial tenant improvement project.

Control over the construction

With rent discounts and tenant improvement allowance, you get to control all aspects of the renovation and oversee the project.

This helps to limit any potential budget deficits resulting from quality issues at the end, as you'll be managing the renovation yourself.

Tax benefits

Anyone that takes responsibility for the commercial tenant improvement gets some tax benefits. If your landlord does the work, they get the depreciation. On the other hand, you can get the tax benefits if you do the work.

Either way, it's essential to consult with a professional accountant before taking any improvements to a commercial leasehold.

Construction planning in commercial tenant improvement projects

The project can be subdivided into three phases:

  • Planning

  • Design

  • Cost estimation

Ensure that you work with an experienced construction company and architect to choose the right design, plan the project and ensure that the standards comply with ADA requirements and building codes. In choosing a contractor, here are some factors to consider

Licensing and Insurance

Ask if the contractor is licensed and insured. Additionally, you should inquire for references or samples of previously executed projects.


Ask for how many years of experience the contractor has in the industry. Your contractor will also help you to arrive at a reasonable estimate of the project's cost.

Choose the right commercial contractor

Now that you know what it entails, why not hand over your commercial tenant improvement projects to Luxury Commercial Contractors? We have years of experience in quality service delivery in the total repertoire of construction management. We help you to achieve your desired design, and our service is code compliant. Contact us to get started.


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