Office Fit Out vs Refurbishment: What the Choice Changes for an NYC Tenant

Raw space or a floor someone already built: the two jobs side by side

The test on a tour is whether the bones move. If walls, plumbing, air distribution or the electrical layout have to change, you are buying a fit-out. If they stay put and only the surfaces change, it is a refurbishment.

• Fit-out: drawings, the landlord's sign-off on them, Department of Buildings filings, orders for slow items such as glass and switchgear, then construction. It is the longer and costlier of the two.
• Refurbishment: often no filing at all when the work is purely cosmetic, though your contractor should confirm that for the building.

The low end of the construction range, paint and light partition work on a floor with good bones, is where a fit-out shades into a refurbishment. The buildout cost and timeline guide splits the budget into its lines.

When a tenant should fit out, and when refurbishing is enough

• Refurbish when the layout already suits how the team works and you intend to stay. This is the usual answer at a renewal, where a refresh contribution from the landlord can pay for it.
• Fit out when the headcount or the way you work has changed, when the space never suited you, or when you are moving to a floor laid out for somebody else.
• Watch the middle. A refurbishment that acquires a new pantry and three glass rooms has become a fit-out without the budget of one. Fix the scope and price it.

How fit-out or refurbishment shows up in the lease

Three parts of the lease change with the scope of work, and all three are settled before you sign.

• The allowance. On a new lease the landlord's contribution is sized to a fit-out and paid against invoices. At a renewal it is a refresh sum. Either way it trades against rent and free months, so the tenant improvement allowance is part of the price, not a bonus.
• The rent start. A fit-out means weeks when you hold the floor and cannot work in it. Ask for free months that span the construction period, and tie the first rent payment to delivery of the space.
• Restoration. Alterations need the landlord's consent, and what you build may have to come out when the term ends. Have the lease name the items, and ask your attorney to confirm the wording.

The third option neither word covers: a prebuilt floor

A prebuilt floor is one the landlord has already built to a finished standard, usually a pantry, meeting rooms and an open desk area, and often furnished and wired too. It needs no fit-out and little or no refurbishment, and a team is typically at work there two to four weeks after the lease is signed.

The trade is that the layout is the landlord's and the construction cost is folded into the rent. Pre-built space explains what is included and what can still be negotiated. The block below holds the furnished and prebuilt floors on our site at present: the option to price before committing to either kind of project.