It starts with a question: “How long will it take to build out the space?”
Most tenants hear the same answer: two to three months. However, the reality is far more complicated, especially when that timeline is built on assumptions instead of actual plans and bids.
Signing a lease without detailed scope and pricing in place can leave tenants vulnerable to massive cost overruns, delays, and rent obligations for a space that isn’t ready to occupy.
It’s a preventable problem that requires proper preparation.
The landlord says four to six months. Why the gap?
During property tours, many landlord reps say the buildout will take four to six months from lease execution. That often seems at odds with what tenants are told elsewhere. Both timelines could be accurate, but it depends entirely on when the real work begins.
Most landlords don’t initiate design or pricing work until a lease is signed. In that scenario, the tenant starts from zero post-execution, with no drawings, no contractor bids, and no clear understanding of how far their allowance will go.
Unsurprisingly, the process stretches into the five- or six-month range or longer.
The real risk: Planning after signing
Many tenants, especially those not working with experienced representation, are surprised that their $20-per-square-foot tenant improvement (TI) allowance doesn’t stretch as far as they thought.
In one case, a professional services firm signed a lease for 5,000 square feet in a midrise office tower. They were offered a $100,000 TI allowance and assured it would be “plenty” for their needs. But they hadn’t yet developed a space plan or reviewed any bids.
Once construction documents were drawn up, pricing came in nearly $80,000 over budget. The tenant was on the hook for the overage, and their move-in date was pushed back by two months. Worse, the lease commencement date had already passed, and rent was due on a space that wasn’t usable.
This situation could have been avoided if the plans and preliminary bids had been completed before signing the lease. That sequence would have allowed the tenant to renegotiate terms or pursue a turnkey arrangement, avoiding out-of-pocket costs and project delays.
In another example, a logistics firm leasing a 25,000-square-foot warehouse believed they had secured a strong TI package to fund a modest office buildout, breakroom upgrades, and minor HVAC improvements. The landlord provided a bid that appeared to come in just under the allowance.
However, after lease execution, the tenant learned that key soft costs had been omitted. The initial estimate didn’t include architectural design, code compliance upgrades, permitting fees, and project management charges. Once factored in, the total cost exceeded the tenant improvement allowance by nearly 40 percent.
With the lease already signed and no provisions for change order protections or rent delay tied to construction milestones, the tenant was forced to delay their operational launch, stretch internal resources, and cover the overage while paying full rent on a facility they couldn’t yet use.
Why this happens: Landlord reps don’t start the clock until you sign
Landlord reps are accustomed to tenants who sign leases before any real planning is complete. They expect to field frustrated calls once the cost gap becomes clear. But since the lease is already signed, there’s little urgency to resolve the issue on the tenant’s terms.
What starts as a vague promise turns into a logistical and financial scramble.
And the timeline? It doesn’t begin when the lease is signed. It starts when the architect delivers permit-ready construction documents and the contractor receives approvals to commence work. If those steps don’t happen until months after signing, the entire project falls behind and the tenant bears the burden.
The better way: Plan before you sign
A well-represented tenant doesn’t leave this process to chance.
With proper guidance, the tenant begins space planning during the proposal stage, not after the lease is signed. That means engaging an architect early, defining the scope with pricing notes, and obtaining preliminary contractor bids to confirm whether the landlord’s allowance will cover the actual cost.
If not, you negotiate before executing. In many cases, the better solution is a turnkey arrangement, where the landlord is responsible for delivering a completed buildout. That eliminates guesswork and shields the tenant from unexpected overages.
In a recent Oxford transaction, a medical practice followed this process closely. By the time the lease was ready to sign, they had completed drawings, obtained two competitive bids, and worked with their broker to negotiate a turnkey delivery. When they received the keys, the space was built on time, on budget, and without surprises.
When tenants skip preliminary planning, they:
- Can’t verify whether the allowance covers their real needs.
- Lose leverage to renegotiate if the scope changes.
- Risk move-in delays tied to permitting and scheduling.
- Face out-of-pocket costs with no recourse.
- May be charged rent on a space they occupy.
These issues directly affect business continuity, disrupt employee productivity, and strain cash flow unnecessarily.
Why it matters more in today’s market
Many tenants assume a soft office market means more flexibility and control. In some ways, that’s true; landlords are offering better concessions and improved rates.
But those benefits are only valuable if tenants understand the full scope of what they’re agreeing to. Otherwise, you might secure a favorable rate and a generous allowance, only to pay double that in unexpected construction costs.
Good faith doesn’t replace due diligence
It’s easy to think a professional landlord or institutional ownership group will make things right if costs or timelines change. Yet, that’s rarely how it works.
Lease language often favors the landlord. The burden falls on the tenant if there’s any ambiguity about delays, construction standards, or scope responsibility. This is especially true when tenants don’t have representation.
How to avoid this mistake:
- Don’t sign a lease without reviewing plans and preliminary bids.
- Confirm soft costs are included in your construction budget.
- Push for turnkey delivery whenever feasible.
- Establish clear timelines for design, permitting, and buildout.
- Include rent abatement clauses tied to space readiness.
- Work with an advocate who manages this process from start to finish.
Move without stress
Leasing problems happen every week, often to smart, experienced business owners who don’t know what to look for.
Signing a lease should signal the start of your project, not the start of your stress. With proper planning and expert representation, you can secure a space that meets your needs, protects your budget, and gets your team up and running without delay.
Let Oxford help you do it right the first time.
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