Nobody thinks of business growth as problematic. But more business generally means you’ll need to hire more people. Soon enough, you just may find yourself outgrowing your current office space. Ideally, you’d probably like to pack some boxes and move you and your team into a brand new space with more square footage. However, that’s not an option for most businesses. Not when you have an existing lease agreement and no time for the downtime commonly associated with a full move. This is when a phased tenant expansion is necessary. This, of course, depends on whether or not you have an expansion clause in your lease. Most landlord lease agreements do not. After all, this would require them to keep spaces next to yours vacant. But clauses can be written giving you the option to expand when the spaces adjacent to yours become vacant. Here are a few things to consider before you embark on a tenant expansion into an adjacent space.

Realistic Impact on Your Day-to-Day Business Operations

There will be some degree of disruption to your day-to-day business operations with phased construction.

These disruptions may include anything from protecting or temporarily relocating your server room to parking challenges if a sizeable chunk of your parking lot is taken up during on-site construction.

You should also expect some degree of reduced employee efficiency and lost productivity. On-site construction during working hours is an added distraction.

Coordinating a hyper-specific and detailed move-in plan is one way to minimize potential workflow delays.

Safety Measures Must Be Taken

The safety of your employees and any on-site customers, clients, or guests must also be factored in. Additionally, measures must be taken to prevent harm or injury to the tenants or guests at any adjacent property tied to your tenant build out expansion.

Redesign of Your Current Space May Be Needed

If you want your current space to aesthetically match your addition, you may need to simultaneously plan a redesign for it. You will also want to factor in shared functionality between your current and new spaces.

Remember, Phased Tenant Expansions Cost More

Phased tenant expansion will generally cost more than any other type of tenant build-out or renovation. Since you’re expanding in phases, there’s less efficiency in construction. The confined workflow also means decreased efficiency amongst other trades like plumbing or electrical.

This is why you should expect to pay premium costs for phased tenant buildouts in and around Los Angeles. These increased costs are mostly due to the project’s extended schedule. Each phase of construction is essentially a “mini project.” This means more design meetings, more necessary admin time, different permits or inspection fees for each phase of the project, additional subcontractor costs, extra costs for procuring or storing materials, etc. Other potential costs may be relocating building systems or keeping certain systems live during relocation.

Having a Construction Manager on Board Helps

Most companies would almost unanimously proclaim they’d prefer a one-shot-move where they entirely moved into a new space rather than building out their existing space in phases. Regrettably, this option is seldom ever on the table.

To save yourself some unnecessary headaches and stress during a phased tenant expansion, find yourself a commercial construction company in Los Angeles that you can trust. A company with proven experience in phased construction project management that will manage and oversee all project details and planning. Someone more interested in guiding you through budget-driven decisions than taking you for a ride to line their own pockets.


H.W. HOLMES, INC. IS A LOS ANGELES COMMERCIAL GENERAL CONTRACTOR SPECIALIZING IN TENANT EXPANSIONS IN LOS ANGELES, SANTA BARBARA & VENTURA COUNTIES. CALL US TODAY AT (805) 383-9929 FOR A FREE PROJECT ESTIMATE