What is Tenant Improvement?

TI Allowance vs. Turnkey Tenant Improvements

Tenant improvements (TI), also known as leasehold improvements, are modifications made by either the building owner or the tenant to a commercial space to accommodate the needs of a tenant. These modifications can include changes to the internal walls, floors, ceilings, lighting, HVAC, and more.

Tenant Improvements are important for spaces to better align with the business brand or in some circumstances service an unplanned space activity. There are different types of shell spaces that can have tenant improvements:

  • Grey shell spaces, also known as cold shell spaces or cold dark boxes, are part of an unfinished building in which the walls are bare, there is no electrical or plumbing, the floors are unfinished, and there is no ductwork or HVAC system.

  • Plain vanilla spaces, also known as Plain white boxes, are part of a building that is almost complete, as there is usually a ceiling, concrete or finished floors, electrical and plumbing, an HVAC system, and restrooms, but have yet to be occopuied.

  • A White Box, also known as a white warm box, are spaces that are complete in construction, have held prior occupancy, and provides an easy turnover for the next tenant. This type is more so related to Landlord improvements (LI) than TI.

Building owners' and landlords’ definitions may vary, but the important part related to cove.tool is knowing what aspects of the building are present or incomplete, and what can be improved as part of a lease agreement. Read more here.

How can cove.tool help with TI projects?

At a quick glance:

  1. Easy and quick model creation

  2. Daylight and views analysis for user comfort.

  3. Energy analysis to reduce utility bills (sensors, appliances, lighting)

  4. Decisions regarding finishes, HVAC systems, insulations, and sustainable strategies within budget.

Tenant Improvement in New Spaces

1) Easy and quick model creation - Use the drawing.tool

TI projects often include modifying particular floors of a building or certain parts of a floor that might not necessarily need a 3D model to be created at a detailed level.

Using drawing.tool, you can easily draw a model by tracing over a plan using simple intuitive elements like walls, floors, roofs, windows and run the analysis on the same platform. Quickly creating a 3d model for analysis enables projects without a BIM for construction to benefit from advanced daylight and energy modeling!

Image 1: Drawing.tool - An in app 3D modeling tool

2) Daylight and views analysis for user comfort - Use 3D analysis

Introducing partitions and divisions is one of the most common tasks undertaken in a TI project. Two major things affected by this is Daylighting and Views which are crucial to occupant's health, happiness, and productivity.

  • Daylighting: Run the daylight analysis like sDA to ensure there is enough light in each portion of your space throughout the year. ASE will help you figure out if there are glare issues for certain parts of the building and need some shading elements to be included.

    It will also help make decisions regarding the placement of activities inside the space.

Image 2: 3D Analysis - a quick sDA run on a 3D geometry

  • Views: Run the view's analysis to check if a wall or partition is obstructing the occupant's views of the outdoors. In the image shown below, one of the cubicles is not getting any views. It might be worth thinking of another placement of cubicles or placing a less used activity like printing equipment there.

Image 3: 3D Analysis - a quick views analysis run on a 3D geometry

3) Energy analysis to reduce utility bills (sensors, appliances, lighting) -
Use the Baseline Energy Analysis

Take easy decisions based on the impact of various technology and building systems.

  • Daylight, as well as occupancy sensors, can help reduce energy and electricity bills for your space.

  • Changing lighting fixtures can have significant effects on energy.

  • Getting an understanding of the appliance use can lead to various advanced technology improvements in your space.

  • Getting more information about your utility costs for the year can help you budget it well.

Image 4: A glimpse of all the inputs and results on the Baseline energy page useful for TI projects

4) Decisions regarding finishes, HVAC systems, insulations, and sustainable strategies within budget. - Using Optimization

  • Comparison between finishes, insulation, glazing options, and HVAC systems to get holistic results.

  • Helps make decisions that fit within a budget.

Image 5: A glimpse of the optimization page

Tenant Improvements in Existing Spaces

When it comes to performing tenant improvements in an existing space, most landlords will offer a Tenant Improvement Allowance so that the space can be reconfigured.

What is a Tenant Improvement Allowance (TIA)?

A tenant improvement allowance is a sum of money that landlords are willing to spend for improvements to an office place or to cover other expenses related to moving into a new space. The TI will be mentioned in the lease agreement, along with a detailed summary of what it can be spent on. The sum of money that the landlord provides to the tenant can cover all or part of the construction costs. Generally, it will be either a total dollar sum, given in TI dollars, or calculated on a per-square-foot basis.

Things to keep in mind

  • It might not be sustainable since this process involves demolition

  • It's better to find a space that fits the majority of your requirements

  • Try to reuse or repurpose as much as possible


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