Leasehold vs. Tenant Improvements. As a St. Louis commercial construction company, one of the most common questions that we receive from potential and existing customers is about the difference between leasehold improvements, tenant improvements, and build-outs. When people ask us about this, there is often some confusion, but the answer is quite simple. There is really no difference between tenant improvements, leasehold improvements, and build-outs. It just depends on what industry you work in and who is looking at the issue.
G. S. & S. Construction is a St. Louis-based company that helps business owners and facility managers succeed in building the future, by offering services like tenant improvements, leasehold improvements, and build-outs. Here is a quick overview of what these three terms mean.
What are Leasehold Improvements?
Before talking more in-depth about the differences between these three terms, it is good to have an idea of what exactly we’re talking about when we’re talking about leasehold improvements, tenant improvements, and build-outs. Put shortly, leasehold improvements or commercial tenant improvements are structural changes that you make to your leased space, in order to make it suitable to unique business needs. Examples of this would be lighting fixture upgrades, a new reception area, and additions of dressing rooms or other new rooms in the building. Sometimes, these changes are paid upfront by the landlord and included in your monthly rent.
The Origin of the Names
When a commercial Realtor is talking about an improvement to their real estate properties, they are most likely going to refer to it as a “tenant improvement”. On the other hand, this same project can be expressed from an accounting viewpoint as “leasehold improvements”. Additionally, from a construction viewpoint, these jobs are typically called “build-outs”. This one type of project can be called three different names, depending on who you talk to.
No matter what name you use, it’s important to consider these changes and improvements when making your business budget. When you’re shopping for commercial space, look for spaces that want to keep startup costs low. And of course, hire tenant improvement contractors that have plenty of experience working on projects in the St. Louis area.
Building Improvements and Leasehold Improvements: What is the Difference?
Some people get building improvements and leasehold improvements mixed up. A leasehold improvement is typically made within the walls of a structure. It focuses on a fixed area of space that will be leased by a single tenant, business or residential. Making these leasehold improvements is advantageous to the tenant because they will improve their business, as opposed to the business of other tenants.
On the other hand, building improvements are improvements that are made to common areas. They can be enjoyed by more than one tenant and are thus considered a benefit to the whole building.
St. Louis Tenant Improvements Contractor
Whether you call them tenant improvements, leasehold improvements, or build-outs, G. S. & S. Construction can handle the job. Our tenant improvement contractor has been serving the St. Louis area for four generations, and our experienced team is dedicated to doing the job the right way.
To learn more about our business, contact us at (314) 298-8100 today.
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