Categories: Commercial Construction, Dental Office Construction

Tenant Build Out: The Cost To Build Out A Dental Office

As a dentist, there are two things you should know about tenant build-out allowance. The first thing is that there are two different kinds of allowance: The Turnkey Build Out and the Stated Dollar Amount. The second thing you should know is to choose Stated Dollar.

Tenant Build-Out Allowance

A big (and sometimes difficult part of a commercial lease negotiation) is the tenant improvement allowance. This is an agreed-upon amount of money a building owner provides for a tenant to use for a build-out or an office space retrofit. Most commercial real estate, like offices, can essentially be dragged and dropped into a new building with little to no issue, but dental offices are unique and you should choose your allowance with that in mind.

For Turnkey Build-Out Allowance, the landlord pays the entire cost of the build-out as part of the lease agreement from start to finish and maintains control over the entire process. For Stated Dollar Amount, the landlord and tenant come to a set amount of money to spend on project cost like a budget but the landlord pays only that amount and you have control over the entire process. Each have their benefits but as a dentist, you should know which is better for you. Having this information can save you money and trouble down the road.

The Turnkey Trap

When it comes to turnkey build-out, it sounds like a dream come true. However, cost isn’t the only thing you should be worried about. Control is just as important. Having the entirety of your build-out or retrofit paid for and managed sounds amazing, but the landlord is in control of the construction. Just like anyone, landlords are probably looking to save money on construction costs. This means that they can pick the cheapest commercial contractors and building materials. They also maintain control of the cash flow, space plan, and entire construction process.

If they don’t know how to build for a dental clinic and you don’t provide precise plans well ahead of time, it could result in some very unpleasant surprises for your office. The initial estimate could have a large margin for errors. Unless you can negotiate with the best of them, any money remaining after coming in under budget will be kept by the landlord.

Stated Dollar Salvation

This method boils down to you being in total control. While you could be potentially paying out of pocket, control is worth it. With stated dollar, you and the landlord agree on a set amount of money and then you’re left to your own devices. Of course, you’re paying for anything over the stated amount, and the average costs of construction on a dental practice can sometimes creep pretty high. This may seem intimidating at first, but the ability to pick your contractors and building materials is essential for good dental office design. Getting the right construction company can ease most of your worries immediately.

A good contractor will know how to build for a dentist including plumbing and the intricate infrastructure and will offer the best materials for your practice. The right commercial construction company can help you throughout the entire process and make sure you’re getting the right construction and materials for the right price. Even if you end up having to pay for some of it yourself, it’s worth it to ensure your office is built properly to avoid massive problems down the road. If you happen to be a natural negotiator and come in under budget, there’s a chance YOU will get to keep the remaining money!

Courting A Contractor

If you can get yourself a contractor you trust who’s had experience in the construction of a dental office and has handled build-out allowance before, you’ll be ahead of the game. As commercial contractors ourselves, we’ve seen build-outs for dental offices and the results are almost assuredly better when the tenant has the control.

A good contractor who knows what they’re doing will be able to work within a budget while still finding the best materials and doing the construction in a timely manner. On top of that, keeping your practice open during construction is something to consider when choosing. Having the right construction company can relieve a lot of the anxiety that comes with controlling the build-out process.

Practice Made Perfect!

Going stated dollar amount with your tenant build-out allowance can be daunting and definitely requires a whole lot more planning upfront, but is more beneficial for any dentist looking to lease a practice. If you know what you need ahead of time and can find a commercial contractor suited for dental office construction, this normally scary process can be made a simple and debonair affair.

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