How to save money on your tenant build-out

tenant build out
tenant build out

In the commercial real estate industry, the term “tenant build-out” refers to transforming raw space into an operating business. This typically includes erecting partitions, installing ceilings and floors, and plumbing, electrical, and HVAC work. Tenant build-outs can be complex and time-consuming, so it’s important to work with an experienced contractor who understands the unique challenges of commercial construction.

While the landlord is typically responsible for providing a shell space that meets minimum code requirements, the tenant is responsible for completing all build-out work. Landlords typically allow for a certain amount of build-out work at the tenant’s expense and may even provide financial assistance in some cases. However, it is important to negotiate the terms of the build-out before signing a lease, as the cost of renovations can add up quickly. 

So, how can you save money on your tenant build-out project? In this post, we shall discuss how you can save money on your next project. Let’s delve in!

Hire a project manager

Many commercial landlords hire a project manager when preparing a build-out for a new tenant. While this can add to the overall cost of the build-out, it can also save money in the long run. A project manager can help coordinate different contractors’ work, ensuring that the build-out is completed on time and within budget. They can also help resolve any problems arising during the construction process. As a result, hiring a project manager can save money by reducing the risk of cost overruns and delays. In addition, a project manager can also provide valuable advice on how to best use the space, helping to ensure that the build-out meets the tenant’s needs.

Get multiple bids

When it comes to commercial tenant build-outs, one of the best ways to save money is to get multiple bids. By soliciting proposals from various contractors, you can ensure that you’re getting the best possible price for the work that needs to be done. Furthermore, it’s important to get bids from contractors who have experience with similar projects. This will help to ensure that the work is done correctly and that any unexpected issues are handled promptly and professionally. Finally, be sure to clearly understand what you want before you begin the bidding process. This will help to ensure that all of the bids are for comparable services and that you can make an informed decision about which contractor is best suited for your needs.

Use Value Engineering

A tenant build-out can be a significant investment, and it’s important to ensure you get the most value for your money. One way to do this is to use value engineering. Value engineering is a process that assesses the cost and feasibility of construction materials and methods to find ways to reduce costs without compromising quality or safety. 

This approach assesses the functionality of each element of the build-out and identifies ways to improve it while still meeting the tenant’s needs. For example, value engineering may recommend using more cost-effective alternatives that meet the required performance standards instead of using higher-priced materials. By working with a value engineer early on in the project, developers can save thousands of dollars without sacrificing the quality of their tenant build-out. In addition, value engineering can also help speed up the construction process by identifying potential problems and suggesting more efficient methods. 

Reuse What You Can

When it comes to your tenant build-out project, one of the best ways to save money is to reuse what you can. This could mean anything from repurposing existing furniture to using leftover construction material. Not only will this help you save on costs, but it will also reduce the amount of waste your project generates.

One of the most important things to keep in mind when reusing materials is to ensure they are safe and up to code. For example, if you are planning on repurposing any electrical or plumbing fixtures, you will need to ensure they are up to date with the latest safety standards. Similarly, if you are using any construction materials that have been damaged or exposed to the elements, you will need to ensure that they are still structurally sound. 

Consider using more Affordable Furniture and Finish-outs

When outfitting your rental property, it can be tempting to splurge on high-end furniture and finish-outs. After all, you want your tenants to have a comfortable and stylish place to call home. However, there are ways to save money on your tenant build-out project without sacrificing quality or style. One option is to choose more affordable furniture. Plenty of stores sell stylish and well-made pieces at a fraction of the cost of designer brands. Another way to save money is to select less costly finish-outs that still look great. For example, you could opt for laminate or vinyl instead of hardwood floors. With creativity and careful planning, you can outfit your rental property in a way that looks great and doesn’t break the bank.

Maximize your tenant allowance

The tenant build-outs experts from AFS General say that maximizing the tenant allowance can help you save money. The tenant allowance is the amount the landlord is willing to contribute towards the build-out costs. By negotiating a higher allowance, you can reduce the project’s overall cost. In addition, it is important to work with experienced contractors who can help keep costs down.


Tenant build-outs can be a costly endeavor. However, there are ways to save money on your project. You can keep costs down without sacrificing quality or style by using value engineering, reusing materials, and choosing more affordable furniture and finish-outs. In addition, by maximizing the tenant allowance and working with experienced contractors, you can further reduce the cost of your tenant build-out project. By following these tips, you can ensure that your project is cost-effective and successful.


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