The landlord of the suite you are considering leasing is offering a $15 per square foot under ceiling tenant improvement allowance. A business associate recommended three “friendly contractors” she knows who could each work up a price to do the work at no cost and no obligation. You would then have three bids for the work. This sounds like a smart way to go, right? Wrong!
Here’s why:
- In order to receive a realistic price from any contractor, you will need to provide them with a fairly detailed list of requirements plus a reasonably good test fit layout. This would include both what is happening “under the ceiling” as well as what is happening above the ceiling (HVAC, electrical) and perhaps outside the suite (see Tenant Misconception #9). Good to have an architect involved at this point. Otherwise, the cost estimate may miss a number of things you will need, or will include some things the contractor is incorrectly assuming you want.
- Putting together a construction estimate, especially based on sketchy information (i.e., not bid-quality documents), is a lot of work. Asking three contractors to do that is a bit unfair. Best to ask just one contractor, with the understanding that if you lease the suite, they will get a chance to hard bid the project. Asking three contractors will likely result in three bids that are not apples-to-apples-to-apples.
- Defining what the “under ceiling” allowance covers and does not cover is also important. Will the landlord be covering work above the ceiling or any incidental work involved in the common areas? Your attorney can help define this, as well as to include provisions of what will happen if the hard bids come in over the allowance. Might be prudent to include an escape clause!
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