What is a Build-Out Cost?

Build-out cost is the expense of preparing vacant commercial or office space for tenant use including interior construction, finishes, partitions, flooring, lighting, plumbing, HVAC modifications, and mechanical systems to customize the space according to tenant specifications and business requirements before occupancy begins, typically negotiated between landlord and tenant.

Comprehensive Definition and Cost Elements

• Interior construction including framing and drywall
• Finishes installed including paint, tile, and carpet
• Partitions built dividing space into offices or rooms
• Flooring, lighting, plumbing, and HVAC modifications

Purpose and Tenant Customization

• Customize space according to tenant specifications
• Tenant business requirements dictate design
• Before occupancy begins ensuring space ready
• Commercial preparation for specific business use

Build-out costs are expenses preparing vacant commercial spaces for tenant use including interior construction, finishes, partitions, flooring, lighting, and mechanical systems customizing space.