Now that you have selected the most optimal office space for your company or professional practice, it’s time to consider some of the finer points – the finishes. In some cases a landlord will provide a turn-key build-out where everything a tenant lists will be done and paid for by the landlord. In other cases, the landlord will limit their work to a specific sum of money, and the tenant will be responsible beyond the stated cap. In still other cases, a tenant will be responsible for all improvements, and the landlord may offset these tenant costs by abating the rent – or they may not even do that. This is really case-by-case. It depends on the property and the market. That said, there should be some consideration contributed by the landlord towards improvement of the premises. This article will focus on a few specific improvements that tenants sometimes overlook, do not state clearly, or simply mis-communicate.
The first finish that I want to cover is the flooring. This is often replaced with a new tenancy, but not always. Over the years I have seen many scenarios. Often in office or industrial facilities, a landlord will underwrite their ‘building-standard’ quality carpeting and base boards when a tenant signs at least a three-year lease – though many professionally managed properties seek 5-10 year terms from tenants. There are no absolutes when it comes to improvements, but this is typical. If a company has a massive staff and treads heavy based on the density in the space, the carpeting should be a minimum of 28 oz. – possibly 32 or 36 oz. A landlord many want to cap flooring/base at $18.00 per square yard or $2.00 per square foot. Exercise caution. What about removal of the prior flooring/base? Installation of the new products? Make sure to specify that heavy grade carpeting and quality base are used to your color/style specifications, installed, and that the prior flooring/base shall be removed. Be as clear as possible. Some landlords may try to cap their responsibility and pass-through the overage costs to you, the tenant. If you want upgrades, for example, stylish tile, wood or other material, you may indeed have to pay for that – but you should not have to pay for flooring costs with a quality ‘building standard’ in at least a three-year lease term. Also, if you need VCT in medical exam rooms, kitchens or server rooms, be clear about this as well. Specify what you need and where you need it so there are no complications later.
The next finish is window treatments. Are blinds on the windows? Are new windows being installed that would need blinds as well? How about hurricane resistant film for older glass and frames? The time to negotiate these finishes is early in the process – not too late. Oftentimes, landlords have a policy of not paying for window treatments. They consider it a tenant responsibility. I disagree. Write it in the scope of work. Nothing ventured, nothing gained. They may not pay for top shelf product, but if you ask, or insist, it is likely they will cave and provide a ‘building standard’ product for you if they want your tenancy. In the case of hurricane film or shutters, this is also a point of negotiation. An option is for the landlord to pay for it and amortize it above and beyond the rent if the cost is high and it is important to you, the tenant.
The third finish that I want to cover is soundproof walls. In many cases, the walls of offices and conference rooms only go up to the ceiling grid and do not go through the plenum up to the deck. As such, sound can more easily pass through the top of the walls. Ask that the walls be built up to the deck. Also, extra insulation in the walls themselves would help muffle sound. If windows are between offices, consider double-glass. There are also wall surfaces available that absorb sound. This material is used in recording studios. Examples of businesses that may benefit from soundproofing are trial law firms, intellectual property law firms, medical practices, technology companies, as well as accounting and media firms.
One more thing: If you inherit office space with furniture, ask to own it at the expiration of your tenancy. Many companies only ask for the exclusive use of it at no cost, but this product could represent thousands of dollars in property that may serve you well in your next facility – plus, the prior tenant or landlord that leaves it for you may not even want to move it later – whether it is because of cost, logistics, or anything else. Write it in.
These are just a few tips from which you may benefit – a tip of the iceberg, so to speak. Every year tenant representatives like me innovate new ways to serve commercial tenant clients. The best part about tenant representation is that it costs you the tenant nothing, and nothing extra, and you get all the benefits of representation while saving thousands to hundreds of thousands of dollars in extra concessions won from the high ground. The next time that you have a space requirement, call a tenant representative and see the difference in your results.