Benefits of Tenant Improvement & How It Differs From Renovation

Tenant improvement refers to changes that are made to a leased commercial property in order to better serve the needs of the space’s tenants. While tenant improvement is often conflated with renovation, these are actually distinct services. Where renovation simply focuses on generally improving the appearance and usability of a commercial space, tenant improvement more specifically focuses on modifying the space to satisfy the current tenants’ requirements. Continue reading to learn more about tenant improvement construction in the Twin Cities, how it differs from renovation work, and how it could benefit your business.

Tenant Improvement vs. Renovation

Although both renovation and tenant improvement focus on improving a commercial building, there are several key factors which differentiate the two construction services:

  • Purpose

The purpose of a renovation project is to give a commercial space a complete makeover in order to improve its aesthetics, functions, and marketability. Renovation projects are commonly performed with the purpose of preparing a commercial property for sale. Tenant improvement projects, meanwhile, specifically focus on the needs of a commercial space’s tenants. Rather than updating a commercial space for more curb appeal, often with the intent of sale, tenant improvement projects focus on making a commercial space as suitable as possible for the current tenants’ business needs.

  • Scope of Work

Generally speaking, renovation projects have a larger scope of work than tenant improvement projects. Renovation may involve a complete overhaul of both the interior and exterior of the building, possibly including the construction of new additions to the existing structure. By contrast, tenant improvement projects generally focus on the interior of a commercial space and rarely involve expansion. Tenant improvement aims to make a space more usable to its tenants through such efforts as improving the appearance and accessibility of the corporate space, installing new features, and updating electrical and plumbing infrastructure.

  • Financing

One of the key differentiators between tenant improvement and renovation is who requests and pays for the construction services. Tenant improvement projects are usually completed at the request of a building’s tenants and, depending on the lease, may be covered fully or partially by the landlord as part of a tenant improvement allowance. Renovation projects, meanwhile, are usually requested and paid for in full by the owner of the commercial property.

  • Project Timeline

While the timelines for both renovation and tenant improvement construction projects can vary based on what all is being done, renovation projects are usually going to be more expansive. Because tenant improvement focuses on satisfying the needs of the current tenants, these projects will generally have shorter timelines that may be stipulated by the lease agreement. A renovation project may require months or even years of ongoing construction work, depending on how large the scope of the project is.

Benefits of Tenant Improvement Construction

Hiring a tenant improvement contractor in the Twin Cities to work on your leased commercial space can be a great decision. Some of the benefits that tenant improvement construction may bring to your space include:

  • Customization – Every business has unique needs and it’s unlikely the commercial space that you move into will meet every one of those needs by default. Tenant improvement allows your company to modify the space you’re leasing in order to better serve your needs.
  • Branding – No matter how well a leased commercial space serves your business’s requirements, it won’t feature any branding for your business. Tenant improvement remodeling can add imagery, signage, and features that promote your company’s brand identity.
  • Tenant Appeal – The benefits of tenant improvement are not limited to tenants; property owners and landlords can benefit as well. If a tenant improvement allowance is offered as part of your leasing contract, you’ll have a competitive advantage in the market since most tenants would rather rent a commercial space that you’re willing to pay to help them customize.
  • Tax Incentives – The expenses of tenant improvement construction often qualify for tax deductions. Both property owners and tenants may benefit financially from these tax incentives.

 

Professional General Contractor for Tenant Improvement Construction in Minneapolis & Beyond

If you’re interested in tenant improvement construction services for your corporate space, it’s important to hire an experienced local general contractor for the job. Reach out to Heritage Construction today if you’d like to learn more about our tenant improvement construction services in Minneapolis and the greater Twin Cities area!