Commercial Real Estate Dictionary

Dictionary >> Definition

<< Build to suit Capital >>


Definitions of Build-out
  • The build-out is the construction of interior improvements to a building's space for the tenant or occupant.
    The tenant is anxiously awaiting completion of the build-out of their new space so they can move in and get their business up and running.

What Is A Build Out?

The build out is the physical improvements made to a commercial space in order to make the space usable and functional for the occupant or tenant. These improvements are also known as tenant improvements.

Since occupants have different needs, commercial space is often built to accommodate a commercial tenant's specific needs. The physical improvements constructed including the walls, ceilings, doors, etc. are all part of the build out.

As a construction project, build-outs are designed by an architect. Many architects specialize in the design of interior commercial space. The build out will be physically built by construction contractors. If the commercial space was previously occupied, the previous improvements will be demolished and removed.

The architect and contractor will have to ensure the build out is designed and constructed in compliance with local building codes and restrictions. They will also have to coordinate the construction project with the landlord, building engineer and tenant.

The cost of build outs may be paid by the landlord, tenant or combination of both. Who bears the cost depends on the trends in the market, the type of space, and the negotiating skills of the parties involved.

The tenant improvement costs are negotiated in commercial leases as part of a tenant improvement allowance. This is an amount of money the landlord will contribute to build out the space for a tenant. A commercial real estate agent can advise on what the terms and amount of the allowance should be.


Real Estate Terms

1. How much cash will be required to make your mortgage payments? Debt Service >>

2. Who can you go to to finance your construction or development project? Construction Lender >>

3. What professional can assist you in maximizing the value of your investment property? Asset Manager >>

4. How can we assess future commitment to infrastructure to support our communities and future development? Capital Improvements Projects >>

5. What measurement indicates if a property's financial performance can cover its debt? DSCR >>

6. What part of a city is the center of urban economic development? CBD >>

7. What allows property owners and professionals to estimate the market value of a commercial property? Comparable Property >>

8. What can landords do to entice prospective tenants? Concession >>

9. What critical factor do stores depend on to drive traffic? Anchor Tenant >>

copyright © 2020 Opmetric Inc. All Rights Reserved. Videos embedded per Youtube Terms of Service.
This website is provided by Opmetric Inc for educational and informational purposes only and should not be considered advice. We make no warranty express or implied as to the accuracy or reliability of information on this website. Information on this website is not guaranteed to be current, complete, or correct.