Leasehold Improvements for Commercial Properties in Toronto
What are commercial leasehold improvements and how exactly do they work? Commercial leasehold improvements refer to building renovations and upgrades that are done by the tenant. Tenants don’t own the building, but with the permission of the landlord, they can make necessary changes to facilitate their business. Sometimes rented properties need a bit of work before companies can use them, and this type of commercial construction allows them to do so. You may be wondering why tenants would foot the costs of upgrades to a building they don’t even own, but commercial leasehold improvements in Toronto work in such a way that they don’t really incur too many out of pocket expenses.
How Commercial Leasehold Improvements Work
There are a few different ways that landlords help with the costs of property maintenance and improvements. The first is a tenant improvement allowance, or TIA. This is one of the more common options—the landlord will typically give you a certain amount of money, known as a tenant allowance, to make improvements as you see fit. The tenant oversees the work, and the amount of money they receive depends on a variety of factors. However, the average TIA ranges from $5 to $15 per square foot.
Another way landlords allow tenants to afford the costs of upgrades is to offer them free rent. They may offer them a few months of free rent, so that they can use that money to pay for the improvements. The size of the discount with this option varies as well, but a popular choice for many is one month of free rent for every year of the lease. This means that with a three-year lease, the tenant will receive three months of free rent. With this option, it’s common for tenants to oversee the work themselves.
Some landlords offer a building standard allowance, or a “build out.” With this plan, the landlord will offer a package of improvements for every tenant, and they’ll be able to choose what they’d like done from the categories offered. For example, for flooring, they may be presented with three different options and have to choose one. In these cases, the landlord tends to oversee the work being done. If tenants would like improvements that aren’t included in the standard build out package, they’ll have to foot the bill themselves.
Some owners opt for a turnkey approach. In these cases, tenants will submit a design plan presenting the improvement they’d like and an estimate of the total cost. If the landlord accepts their proposal, they will pay for and oversee all of the work.
Choose Lincoln Construction Group for Commercial Leasehold Improvement
If you’re making leasehold improvements to your property, choose Lincoln Construction Group to help you make the changes you need. No business can thrive in unfavourable conditions, so let us help make your property the best it can be. From commercial landscaping maintenance, asphalt paving, site work, and more, we’ll do whatever it takes to make your vision a reality. Contact us today to learn more about our services and to get a free estimate.