The Cost of an Office Build-Out

by CoyDavidson on November 30, 2011

IMG_8818

A key component of any lease negotiation is the tenant improvement allowance provided by the landlord to build-out or retrofit an office space for the tenant’s specific use.

One of the first questions every tenant has when considering either new or refurbished office space revolves around how much will build-out or tenant improvements (T.I.) cost? The tenant’s cost exposure is a key factor in the decision making process and important component in determining your projected total occupancy cost.

Projecting build-out costs beyond general ranges is challenging without the benefit of the space planning process, and so many building type options and lease size parameters that affect this estimate. Our friends at Kirksey Architecture provided this Tenant Improvement Cost Guideline.

Tenant Improvement Costs: Updated 2015

All categories reference a 25,000-sf floor plate with 50% offices and 50% open plan. Construction cost only, does not include owner provided AV and IT equipment. This is a guideline only and actual costs will vary based on the condition of the original space, the amount of re-usable assets, the tenant size (say ½ floor versus full floor) and other factors.

Building Standard Office Office Space: $39 to $48/SF

The most basic applicable space to type A building, but using all new components – 18-cell parabolic lights, stndard 2×2 fineline ceiling, wood veneer building standard doors with mortised hardware, no glass at office fronts, minimal millwork and all plastic laminate, $25/yd broadlooom carpet, standard electrical and HVAC.

Mid-Range Typical Office Space: $53 to $67/SF

Upgraded with 2×4 recessed direct/indirect light fixtures, 2×2 fineline ceiling, wood veneer building standard doors with mortised hardware, full-height glass office fronts in aluminum framing system, more extensive plastic laminate millwork with solid surface countertops throughout, $35/yd carpet tiles, more extensive electrical service with 24/7 server room  AC and two supplemental fan-coil units for conference room zones.

Executive Office Space: $89 to $142/SF

Upgraded with some drywall ceiling areas with indirect cove lighting, architectural woodwork doors and frames, glass office fronts in matching wood framing; 30% of wall areas as premium grade architectural woodwork, 40% with acoustical fabric wall covering, 30% as painted drywall; extensive wood veneer millwork with granite countertops, $45/yd broadloom carpet, more extensive lighting and custom fixtures for artwork and accent areas.

Get my posts via e-mail: here

  • Lucy Price

    Tenants should also check their area for any rebates, incentives or concessions the local government or utility is offering to build-out energy efficient space.  Efficient T8 lighting, motion sensors, high efficiency split systems for server rooms and the like could qualify for rebates from the local utility and possibly tax advantages, for which tenants should consult their accountant.  For futher information check http://www.dsireusa.com for what is available in jurisdictions accross the U. S.
    The incentive will help pay for the difference in cost,between energy efficient and code, if there is any, plus reduce the building’s electricity cost.  That’s a plus for both sides of the table.

  • Jwalkerinmd

    This is good insight and I like Lucy’s comment below.  I would think that the variance in TI costs would largely be a function of the labor rates for each market across the U.S.

  • Pingback: Urban Eco Group - The Cost of an Office BuildOut | Atlanta Green Builder()

  • MonkeyMan

    Oh indeed. If union workers are required the labor cost will skyrocket.
    To the Moon!

Previous post:

Next post:


Disclaimer: All blog entries on this site are the opinion of the author and not those of either Colliers International - Houston or Colliers International (collectively, "Colliers"). Colliers neither endorses, sponsors nor necessary shares the opinions of the author, regardless of whether any blog is posted by any employee, officer, agent, or representative of Colliers. Colliers has not authorized or verified any statement of fact made in a blog, and any such statement does not constitute a statement of fact by Colliers. Colliers is not responsible for the monitoring or filtering of any blog, nor does Colliers claim ownership or control over any blog content.