Tenant improvements, buildouts, and getting open on schedule

What a commercial buildout costs, by use

Commercial cost per square foot varies more by use than by finish level, because the services a space needs are dictated by what happens in it. A law office and a dental clinic in identical shells are not the same project.

These are Metro Vancouver construction cost ranges for 2026. They exclude furniture, equipment, and professional fees, all of which are substantial on commercial work and are frequently left out of comparisons.

Cold shell, warm shell, or second generation

The single biggest variable in a commercial quote is what you are starting from, and the terms landlords use for it are not standardised, so it is worth confirming what is actually included rather than trusting the label.

A cold shell is bare: concrete, demising walls, a service entry point, and little else. No distribution, no ceiling, sometimes no washrooms. Office buildouts from a cold shell run $80 to $150 per square foot, and restaurant space runs $150 to $300 because of the plumbing, ventilation, and fire suppression that has to be created from nothing.

A warm shell typically has base building HVAC, distribution to the space, a finished washroom, and sometimes a ceiling grid. Second-generation space is a previously fitted-out unit, and how much it helps depends entirely on whether the previous use matches yours.

That last point catches people. A second-generation office refreshed for another office might run $30 to $70 per square foot. Tearing out a dental office to build a law firm costs $15 to $25 per square foot in demolition alone before anything new goes in, because you are removing specialised plumbing, lead shielding, and cabinetry that has no value to you.

Tenant improvement allowances, and how to negotiate them

A tenant improvement allowance is money the landlord contributes toward your fit-out. In Metro Vancouver in 2026, typical allowances run $15 to $50 per square foot for office, $30 to $60 for medical or professional space, and $40 to $100 for restaurant or food service.

Compare those against the buildout costs above and the gap is obvious. Most tenants fund a substantial share of their own space, and a business that budgets only for the gap between allowance and a rough estimate is a business that runs out of money in month two.

Lease length is the strongest lever. A landlord amortizes the allowance over the term, so a five-year lease might attract $25 per square foot where ten years attracts $45 to $55. If you are confident about the location, term buys allowance.

The second lever is evidence. Show the landlord the gap in writing: if the buildout costs $110 per square foot and the allowance is $35, put the breakdown on paper. A reasonable, documented gap analysis frequently moves an allowance $5 to $15 per square foot, and it costs nothing but the hour it takes to prepare.

Also negotiate what the allowance covers and when it is paid. Some are paid on completion, some in draws, some only against specific categories of work. An allowance paid at the end means you finance the whole buildout in the meantime, which is a cash flow question rather than a cost question, and it needs to be in the plan.

Restaurant and food service buildouts

Restaurants are the most demanding commercial buildout and the least forgiving, because the systems that cost the most are also the ones that determine whether you can open at all.

A full buildout from shell runs $250 to $400 per square foot, a moderate renovation with kitchen upgrades and new ventilation $150 to $250, and a basic refresh with no kitchen changes $60 to $100. On a 2,000 square foot full buildout at $300 per square foot, roughly $600,000 total, the distribution is instructive.

Ventilation is the single largest item at $55,000 to $110,000 for the hood, exhaust, makeup air, and ductwork. Fire suppression is $15,000 to $35,000. Plumbing with a grease interceptor, three-compartment sink, floor drains, handwash stations, and backflow prevention is $35,000 to $60,000. Electrical including a panel upgrade, commercial circuits, emergency lighting, and point-of-sale rough-in is $40,000 to $65,000. Commercial non-slip flooring throughout is $20,000 to $40,000.

Everything above happens before a single finish is chosen, which is why restaurant clients who arrive focused on the dining room aesthetic often get an unwelcome education. The design has to start from the kitchen layout and the ventilation route, then work outward.

Health authority review runs alongside the building permit rather than after it, so the plans have to satisfy both. We involve restaurant consultants and equipment suppliers early, because equipment specifications drive the plumbing, electrical, and ventilation design rather than following it.

Office, retail, and clinic work

Office buildouts have changed shape since hybrid work became normal. We build more collaboration space and fewer private offices, more meeting rooms of varied size, and better ventilation, which tenants now ask about directly. Older buildings with fixed HVAC serving a fixed layout need creative zoning solutions when the floor plan changes underneath them.

Cost tracks the type of office more than the finish level. Tech and creative offices are usually cheapest at $60 to $100 per square foot because open plans need fewer walls. Legal and accounting offices land at $90 to $130. Executive and client-facing space with premium finishes and custom millwork runs $130 to $200. Specialised space with boardroom AV or server rooms runs higher again.

Retail is driven by the storefront and the lighting. A basic fit-out with paint, flooring, fixtures, and lighting runs $50 to $80 per square foot; mid-range with custom display fixtures and branded elements $80 to $130; high-end with premium finishes, custom millwork, and integrated AV $130 to $200 or more. Storefront modification with new glass, signage, and entrance work adds $20,000 to $60,000 on top of the interior.

Medical and dental are the most specialised. Dental buildouts routinely run $200 to $250 per square foot before equipment, because of the plumbing to every operatory, the electrical, the sterilization area, imaging room requirements, and infection control. A clinician looking at a $40 per square foot allowance should understand it will cover perhaps 15 to 20 percent of actual construction cost.

Permits, code triggers, and health authority

Commercial permitting is a different animal from residential, and the timeline difference between a straightforward path and a complicated one is measured in months rather than weeks.

A straightforward tenant improvement goes through the building department and typically takes 6 to 10 weeks. Where a development permit is required, which covers change of use, exterior alterations, and signage, expect 3 to 6 months. Food service adds regional health authority review running alongside the building permit. Fire department review applies to occupancy loads, exits, and suppression.

Two code triggers catch owners of older buildings. Accessibility upgrades under the BC Building Code, including barrier-free washrooms, accessible entrances, and path-of-travel work, apply once renovation cost passes a threshold relative to the building's value. And in pre-1990 unreinforced masonry buildings, structural modifications such as removing walls, adding a mezzanine, or changing floor openings can require seismic review.

Neither of these is a reason to avoid an older building. Both are reasons to have a structural engineer look at the scope during design rather than discovering the requirement at permit review, when the budget is already committed and the lease is already running.

Every week dark is a week of rent with no revenue

This is the fact that should shape every decision on a commercial project. From the day you take possession, rent runs whether or not the doors are open. On a 2,500 square foot space, four extra weeks of construction is real money out of the business before it has served a single customer.

So the sequencing is different from residential. Long-lead items get ordered before demolition rather than during it, because commercial kitchen equipment, custom millwork, storefront glazing, and specialty lighting all carry lead times measured in months. A project waiting on a hood is a project paying rent for nothing.

Inspections get booked ahead rather than called for when a trade finishes, because inspection lead times are real and a two-day wait becomes a week when nobody planned for it.

And the schedule you receive should show the critical path rather than a single completion date, including any landlord work that has to precede ours. You should be able to see which items actually control the opening date and which have slack, because that is what lets you make informed decisions when something moves.

Renovating around an operating business

Sometimes closing is not an option: a retail store through the fall, a clinic with booked patients, an office where the staff cannot go anywhere. Phased work costs roughly 15 to 30 percent more per square foot than an empty-shell buildout, and it is often still the cheaper option once lost revenue is counted.

Phasing means real separation. Hard hoarding with a proper door, dust control on the operating side, and a plan for how customers and staff move through the building while a section is a construction site. Noisy and disruptive work moves to evenings or weekends where the building's rules allow, and that premium belongs in the estimate up front rather than appearing later as a change order.

What cannot be phased is anything touching the main electrical service, the sprinkler system, or the building's plumbing stack. Those need a full shutdown of that system, and pretending otherwise just moves the disruption to a worse moment. We identify those items during scoping and schedule them for the least damaging window.

How a commercial project runs

The order below is built around protecting the opening date, because on commercial work that is what the client is actually buying.

1. 1

   Space assessment before the lease is signed

   Services, ventilation routes, plumbing stack location, floor drains, electrical capacity, and grease interceptor. What is missing becomes a negotiating position rather than a surprise.

2. 2

   Code, accessibility, and structural review

   Whether the scope triggers barrier-free upgrades, and whether structural changes in a pre-1990 masonry building trigger seismic review. Determined during design, not at permit review.

3. 3

   Design coordinated with equipment

   For food service and clinical space, equipment specifications drive the plumbing, electrical, and ventilation design. The kitchen or operatory layout comes first and the rest works outward.

4. 4

   Permit and health authority in parallel

   Building permit, plus regional health authority for food service and fire department review where applicable. All running alongside procurement rather than before it.

5. 5

   Long-lead ordering before demolition

   Kitchen equipment, hoods, millwork, storefront glazing, and specialty lighting. These control the opening date more reliably than any trade does.

6. 6

   Construction with inspections booked ahead

   A schedule showing the critical path, including landlord work that must precede ours, so you can see what genuinely controls the finish.

7. 7

   Occupancy, commissioning, and handover

   Final inspections, systems commissioned, staff training access arranged, and the punch list closed before opening day rather than after it.