Who Build Outs the Space, You or the Landlord?
Often the existing layout of an office, loft, showroom or medical space needs to be modified in order to suit a potential tenant. “Building out” a space allows it to be customized to best meet a firms’ needs, and often involves building sheetrock walls, modifying electrical distribution, adding floor treatment, installing HVAC, lighting fixtures and painting. When tenants are evaluating a space one of their first questions for their real estate broker should be whether the landlord is willing to modify a space on their behalf.
Many of New York City’s commercial landlords will build out a space for a credit-worthy tenant. Assuming the tenant signs a lease term of at least five years (so the landlord has sufficient time to amortize the cost of construction), the landlord will often modify an existing space or, if necessary, renovate it. For leases shorter than five years, landlords will usually agree to paint the space and, in some cases, provide and install carpeting or other flooring finish.
Some landlords simply do not want to get involved in build outs, particularly when the construction is of a specialized nature, such as a build out for a medical facility or a salon. In such situations, the landlord may provide the tenant with a work letter or rent credit to offset the tenant’s construction costs. Landlords who are renting retail or restaurant space generally offer it only in “as is” condition. Owners of small buildings in Manhattan are sometimes unwilling to provide any tenants with more than a fresh coat of paint or new floor finish, so any further improvements are the responsibility of the tenant.
It is always advisable for a tenant seeking to acquire office, loft or showroom space in Manhattan to ask there broker what improvements a landlord is willing to make to their space.
For a more in depth explanation contact Alan Rosinsky at (212) 447-5403, Principal Broker of Metro Manhattan Office Space, Inc.
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