Ever Wonder What Goes Into Constructing a New Clinical Space?
It all comes down to Tenant Improvements (TI). TI allowance covers the changes that transform an empty suite into a functional, patient-centered environment. From the exam rooms to the waiting area, this is what makes your space truly yours.
What Are Tenant Improvements?
Tenant Improvements are the construction and upgrades that make a leased space usable for your practice. They are typically negotiated in your lease and may be funded by the landlord, the tenant, or both.
Common examples include:
- Walls and flooring
- Lighting and electrical work
- Plumbing and restrooms
- Layout and design features that customize the space for patient care
These improvements are usually structured as an allowance, a turnkey project, or a shared expense.
Two Structures of TI Projects
When it comes to who oversees the construction, there are two common approaches:
Tenant-Controlled
The contractor reports directly to you, the tenant. This gives you more influence over the budget, design decisions, and timeline.
- Pros: You control the schedule, can generally speed things up, and help keep the project within budget.
- Cons: You are responsible for oversight and coordination, which can require significant time and attention.
Landlord-Controlled
The contractor reports directly to the landlord. This may be less hands-on for the tenant, but also limits control over decisions and timing.
- Pros: You do not have to manage the build-out or oversee contractors.
- Cons: Projects sometimes take longer, and cost overruns can still occur even though you are not directly managing them.
The Bottom Line
Both approaches can work, and the right choice depends on your practice’s specific situation. Some doctors prefer the control of managing the process themselves, while others value the convenience of letting the landlord take the lead.
