Skip to content
An empty newly renovated commercial space after a tenant improvement

Build your Vision with Tenant Improvements

Are you ready to bring your business vision to life? Tenant improvements are the key to transforming a generic commercial space into a customized environment that perfectly reflects your brand.

As an electrical contractor with a proven track record of completing tenant improvement projects for franchises and new businesses, we understand the unique challenges and opportunities involved. In this blog post, we'll share what to know before starting a tenant improvement and practical advice to help you make informed decisions and achieve your business goals.

What are tenant improvements, leasehold improvements, and build-outs?

Although there are various names, they all mean virtually the same thing. Generally, tenant improvements are the indoor renovations of a rented commercial property to satisfy the needs of the current tenant. Examples of tenant improvements could be changing the layout of the space, customizing flooring or lighting, adding equipment, or painting.

There can be many stakeholders in a tenant improvement project besides the tenant (lessee) and the building owner (lessor). The owner may have a property manager that oversees the daily running of the project and property. If the business is a franchise, then a company representative will surely be involved in addition to the franchisee. If the property is part of a mall, there could also be a site representative that ensures construction follows the site's internal policies. Lastly, general contractors and subcontractors (like electricians, plumbers, painters, etc.) are also involved in completing the project.

A successful renovation in your commercial space is made possible when each stakeholder works together in a planned and organized way.

a real estate agent shows building imrpovements to new tenants

Leasehold improvement costs and ownership

Who pays for the tenant improvements?

Tenants typically pay for tenant improvements. There are various possibilities, though, which are entirely dependent on the lease agreement and circumstances of the property and businesses. During construction, you may discover some critical issues or improvements the commercial space needs, like bringing some aspects up to current safety regulations. In those instances, it's likely the responsibility and cost of the landlord to make these changes as they are fundamental parts of the space's utility.

What are tenant improvement allowances?

Tenant improvement allowances are a great benefit that varies widely from lease to lease. They can vary by renting market, lease terms, building age, company relationships, and more. These allowances are agreements of contributions from the landlord towards projects. The allowance can be reflected in rent prices or other ways.

What is a leasehold improvement CCA?

A capital cost allocation (CCA) is accounting related to leasehold improvements. The tenant and the building owner can depreciate the improvements, but the rates vary. Your bookkeeper is the best person to speak to for guidance on this subject.

Who owns the tenant improvements?

Although the tenant pays for most, if not all, of the improvements, the building owner typically keeps the construction. If the tenant builds new walls and lays new flooring, the tenant can't take them when moving to a new location. Some exceptions exist, like equipment or material that can be removed and taken without causing damage to the property. This is decided on a case-by-case basis and must be agreed upon by you and your landlord.

A commercial lease agreement

How to assemble a tenant improvement construction team

This can vary based on the scope and depth of the renovation. If it is on the simple side, where only a few trades may be needed, like electrical work, painting and drywalling, then a sub-contractor-led project might be best. In that case, you would hire the trade contractor that is most needed, and they would arrange and manage the other subcontractors.

If the project involves larger-scale construction where various trades are needed, then it's best to hire a general contractor.

What is best to look for when hiring contractors or general contractors is a portfolio of work that is like what you desire for your business's facility. It is more than that, though. Finding companies that provide good communication, customer service, guidance, and efficient work is equally important.

Kraun has provided licensed electrical contracting services for various companies, large and small. We have helped with tenant improvements in many large and small projects, including popular franchises like Wendy's, Osmow's, and On The Run. We always emphasize a service-first approach to our work and have divisions that can serve any size project. Our pride is working with business owners, from planning to construction to providing regular electrical services and maintenance. So whether you are considering signing a lease for a new space or you already lease and require a renovation, we would love to be a part of your project. Please get in touch with us at 1-844-667-6937,, or by filling out the form below.

We look forward to getting started!

Let's start a job together.

Serving the Hamilton and Niagara area.