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Commercial Tenant Improvement

Whether you’re a landlord thinking about pursuing some updates and remodels to the inside and outside spaces of your units, or you’re a unit tenant looking to freshen up your rental space, remodeling is a wholly worthwhile consideration. There are many impactful benefits to remodeling and improving one or more rental spaces, including providing yourself with more living space and increasing your personal safety throughout the rooms. In this article, we’ll discuss what leasehold improvements are, the specific details of a tenant improvement allowance, and some of the top leasehold improvements to consider for your rental property.

What are Leasehold Improvements?

Commercial tenant improvements are frequently referred to as commercial leasehold improvements or simply leasehold improvements. These types of improvements take place when a given landlord offers discounted rent or outright payments to a tenant so that they may make various improvements to the tenant’s specific property. Either the tenant themself or the landlord hires one or more contractors to perform the work. The landlord will either reimburse the given tenant for whatever repairs take place, offer a reduced rent price to the tenant, or pay for the various repairs directly. There are different types of common tenant improvements that can take place.

Amongst the most common types of commercial tenant improvements are rent discounts, tenant improvement allowances, turnkeys, and building standard allowances. TIA is a common abbreviation for a given tenant improvement allowance. Building standard allowances are also often referred to simply as buildouts.

Rent Discount

With this type of discount, a given landlord provides the affected tenant with a reduced rent rate or free rent for a particular span of months that is equal to the amount the improvements will cost. The landlord then oversees the different work activities to ensure high quality and their satisfaction with the final results.

Tenant Improvement Allowance

With a standard improvement allowance, a given landlord provides the affected tenant with a specific amount of money to make the various unit improvements. The landlord then oversees the work activities to ensure quality and their satisfaction.


The given tenant develops and submits an outlined design plan with a turnkey. The outlined design plan shows the potential unit improvements as well as the estimated unit improvement costs. Then, the landlord provides payment for the improvements and proceeds to oversee the work.

Building Standard Allowance

The given landlord provides an overall package of unit improvements to each tenant they oversee with a building standard allowance. After providing this improvements package to all tenants, the tenants continue to decide on final improvements. Each tenant then pays for any chosen improvements beyond the building standard allowance, or buildout.

Tenant Improvement Allowance

As one of the most common kinds of commercial tenant improvements, a tenant improvement allowance has many benefits and considerations for the involved landlord and tenant or tenants of the given unit. With this type of unit improvement, the tenant often oversees the work to a degree, and the landlord oversees to ensure quality and consistency due to their vested interest in the project’s details, timeliness, and ultimate success. As a tenant participating in this type of tenant improvement, one of the hugest benefits is the increased level of control you have over the project itself, including its details, actions, timeliness, and results.

As a tenant participating in a tenant improvement allowance, you are also less likely to endure various quality issues, concerns, or overall cost overruns that can occur, such as with other types of commercial tenant improvements. With a building standard allowance or turnkey, you don’t have as much freedom to pursue specific complex work or desired customizations. You also risk the chosen contractor doing a poor job on the project. You have more control as a tenant participating in a tenant improvement allowance plan in contrast to other plans. Once you understand the impactful benefits of this improvement plan, you can begin planning your unit improvements.

Top Leasehold Improvements

There is a range of commercial tenant improvements you can make to a given unit. Some of the most common unit improvements you may want to consider are adding in new walls, changing lighting and flooring, painting, adding in more partitions, putting up display shelving, and adding in new offices or walls. Some other examples of leasehold improvements include changes to a unit’s ceilings and internal plumbing fixtures. However, leasehold improvements by definition only occur in the interior spaces of a particular unit. Other building improvements, such as exterior modifications, elevator upgrades, walkway paving, and roof construction don’t qualify.

Putting Up Display Shelving

The internal spaces of a given rental unit have a lot of potential when it comes to updating and designing for higher levels of quality, consistency, and overall beauty. One of the most popular leasehold improvements to consider is putting up display shelving. This improvement is highly desirable for kitchen areas to achieve additional kitchen cabinetry and other shelving.

Adding in New Walls

If you want to take advantage of the rental space you have by adding new walls, this is another popular leasehold improvement to consider. By adding new walls to a rental space, you can have more division for individual tenants if the space is shared, or enjoy more division for different activities and purposes.

Painting the Existing Walls

If you don’t enjoy the bland, expressionless wall colors that are fairly common in rental properties, consider improving your property by painting the existing walls. A number of colors continue to be widely popular, including deep colors, dark neutrals, pastels, and sea tones.

Changing Internal Plumbing Fixtures

Another popular room to make improvements in is the bathroom. You can enjoy the increased safety and beauty of changing your internal plumbing fixtures and other elements for a truly luxurious feel.

Commercial Tenant Improvements With Project Build

Whether you’re a landlord or tenant, commercial tenant improvements are wholly worthwhile and come with a number of options and considerations. To get started with your leasehold improvements, contact Project Build today.

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