Having the right work space is essential for productivity; however, it is unlikely that a company will find a space to lease that fits their exact needs. To remedy this in the most efficient manner, many companies choose to redesign leased space. While this may add some expense to the initial cost of leasing a facility, working with good commercial real estate brokers who understand a company’s needs and redesign goals can help a business find the right space for the right cost. Brokers know the most suitable spaces that can be modified as necessary to attain specific goals and oversee negotiations between a building owner and tenant.

New Construction vs. Modification

Most landlords are willing to let the right business tenant redesign the interior of a space if it is done professionally and according to any agreement between the two parties. Following are some of the typical redesigns of a leased space:

  • New Construction – The best time to lease space from a building is when it is brand new, before the interior has been completed. Corporate and commercial buildings are frequently left with basic, unfinished interiors since building owners know most companies want to design the space to suit their needs.

  • Modifying Existing Areas – When leasing a finished space, negotiations will center on what a new tenant is permitted to have. Commercial real estate brokers are very important at this point; they can be instrumental in drawing up agreements between building owners and tenants to redesign a space. Limitations on what can be done, how much can be spent, and what the landlord is willing to pay must be documented ahead of time; most owners are willing to negotiate this for the right length of lease.

Design Plan Details

Whether completing a new space or redesigning an existing one, certain practices must be followed.

  • Contractors – It is important for tenants to first verify if the landlord requires work to be performed by their own contractors or if the lessee may bring in their own. Most landlords who own larger buildings that deal with commercial real estate require the use of specific union contractors – who can charge up to twice as much as an hourly, non-union contractor.

  • Design – Once the contractor issue has been resolved, the design itself must be approved, budget set, and an agreement drawn up stating which party is paying for what – and when. Changes to carpet, paint and furnishings are fairly standard for existing spaces. Moving walls and other types of larger jobs are sometimes permitted, but are often quite expensive.

    In this type of situation, it may be best for a company to continue working with their commercial real estate brokers to find a more suitable space. There are circumstances where the location or the building itself is desirable enough that a company may want to negotiate with a landlord regarding a bigger job. It is important to note that the building owner may not assume the entire cost of this type of project.

Who Pays for Office Space Redesign?

When it comes to paying for the redesign, whether a new space or an existing one, it is customary for the tenant to pay for the construction and the landlord to reimburse the tenant. This is a landlord guarantee of sorts that a tenant will lease the space for a while. Reimbursement is usually in the form of reduced or free rent for a contracted amount of time to cover the costs incurred.

It is important for a business to realize when planning for a new office space that a budget should be established for any necessary design changes to make an area useable by a company. Whether there will simply be a few minor, cosmetic changes or a complete redesign (where a company may have to pay that bill up front) is necessary, working with a commercial real estate broker who can negotiate for a tenant’s needs is essential!

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