Tenant Improvements in San Antonio: What to Check Before You Sign a Lease

A tenant improvement in San Antonio turns a leased commercial space into one your business can open in, and its most expensive surprises are usually locked in before construction starts, at the moment the lease is signed. A space that is zoned wrong, needs a new certificate of occupancy, or lacks the power your equipment needs can turn a simple refresh into a major project. The rules below are the City of San Antonio's. Other cities in the area run their own permit offices, so a space in New Braunfels or Schertz follows that city's process.

What a tenant improvement includes

Tenant improvements, often shortened to TI and also called a commercial build-out or finish-out, are the changes made inside a leased space so it works for one specific business: walls and doors, ceilings and lighting, restrooms, power and data, HVAC distribution, flooring, paint and millwork. Your lease decides who pays. Many landlords offer a TI allowance toward the work, some deliver finished space as landlord work, and some leave the whole job to you. Furniture, movable equipment and base-building items such as the roof or structure usually sit outside the TI budget, but only your lease and work letter settle that for your space.

How the space is delivered sets the starting point for your scope:

1. Confirm the use is allowed at the address

The City's Development Services Department (DSD) says on its Getting Started page that the first step is finding out what types of businesses are allowed at the property, including whether it is zoned properly and has enough parking. Do this before the lease is signed, not after. A landlord's listing describing a space as "flex" or "retail" does not settle what the City will approve for your use. The same page notes extra requirements for work in historic, flood plain, RIO, neighborhood conservation, overlay and corridor districts, and locational requirements for businesses that sell alcohol.

2. Check the certificate of occupancy history

DSD's Certificate of Occupancy page says no building or structure can be used or occupied until the department has issued a certificate of occupancy. A new one is needed when the business use changes, and DSD's own example is a clothing store becoming a hair salon. For most businesses, if ownership changes and the use and occupancy classification stay the same, you can request a name change on the existing certificate. DSD lists exceptions that still need a new certificate, including bed and breakfasts, boarding homes, community homes and assisted living facilities, head shops, live entertainment, salvage yards and metal recycling facilities, and transitional homes. Confirm your business type with DSD before relying on a name change.

DSD also says each tenant space in a multi-tenant building needs its own certificate for its approved use, and that renovating a space with an existing certificate can usually be handled without a new one when the business use and occupancy have not changed. DSD issues a Certificate of Completion for shell buildings with unfinished suites, so if you lease an unfinished suite, expect your build-out to be the work that carries it to a certificate of occupancy for your use.

That difference shapes your scope. Moving into a space for the same kind of business can mean finishes and furniture. A change of use can bring code upgrades to exits, restrooms, fire protection and mechanical systems.

3. Ask the landlord the right questions

• Delivery condition. Is it a cold shell, a warm shell or a second-generation space with usable systems? Get it in writing.

• TI allowance. What does it cover, when is it paid, and what paperwork does the landlord require to release it?

• Work letter. Which items are landlord work and which are tenant work, and who approves your drawings?

• Utilities. Electrical service size, HVAC capacity and age, water and sewer sizing, and gas if you need it.

• Fire protection. Is the building sprinklered, is there a fire alarm system, and who maintains them? Moving walls can mean moving sprinkler heads and alarm devices, which carry their own permits.

• Drawings. Request as-built drawings and the landlord's construction rules, including after-hours work and roof access.

• Roof and building envelope. If the roof is near the end of its life, find out whose problem that is. Commercial roof replacement planning takes its own budget and schedule, so settle responsibility in the lease.

What drives commercial build-out cost

Without drawings and a walk-through of the actual space, any per-square-foot figure is a guess. These items move a commercial build-out budget the most, and you can check each one before you sign:

CPS Energy's commercial renovation steps say requests for new, relocated or removed service go to its Customer Engineering Department, which assigns a designer to the project, and that the electric meter is set and locked until CPS Energy receives the city's permit inspections. If your equipment needs more power than the suite has, put that design work on the schedule from day one. The electrical work itself is performed and permitted by licensed electricians; see commercial electrical coordination in San Antonio.

Finishes are the easiest place to adjust a budget. Commercial painting and drywall and commercial flooring installation can be specified to fit the allowance, and commercial painting in San Antonio covers finish choices and how to paint while a building stays occupied.

4. Design, accessibility and plan review

Most commercial build-outs need drawings from an architect or engineer covering layout, life safety, accessibility and mechanical, electrical and plumbing systems. Accessibility in Texas follows the 2012 Texas Accessibility Standards, effective March 15, 2012 and administered by the Texas Department of Licensing and Regulation (TDLR). TDLR's Architectural Barriers program has projects registered in its online TABS system and uses Registered Accessibility Specialists for plan review and inspections. TDLR also notes that the owner listed in TABS must be the entity that holds title, matching appraisal district records. For a tenant, that means the landlord's information goes on the registration, so line up that cooperation early.

TDLR's Architectural Barriers FAQ says projects with costs of $50,000 or more must submit a full set of construction documents for review, while projects under $50,000 are not required to be registered but must still comply with TAS. Ask your design professional to confirm how those rules apply to your project.

DSD offers a Preliminary Plan Review Meeting for design teams to discuss a building permit before submitting. On a change of use or a tight schedule, that meeting can surface code questions before they become plan review comments. DSD's plan review page lists the reviewers a commercial submittal can reach: Development Services trades and zoning, Public Works accessibility, Metro Health, Historic Preservation, and SAWS aquifer protection for sites over the recharge zone. Each one that applies can return comments, so organized construction drawings and permits save resubmittals.

5. Permits and who pulls them

DSD says the business owner or an agent (contractor, engineer, architect or tenant) can apply for a commercial building permit using its Commercial Project Application and Guide, and that permit time varies by project type. The same page says the City has no licensing requirement for commercial general contractors, but every licensed trade contractor must be registered with the City before a building, electrical, plumbing or mechanical permit is issued, and general contractors cannot pull trade permits or request trade inspections. Electrical, plumbing and mechanical work is therefore permitted and inspected through the licensed trades. For how those permits fit together, see San Antonio building permits: when and who applies.

Not every item needs a permit. DSD's commercial permit process page lists painting walls, adding floor tile or carpet, minor millwork and cabinetry, and replacing windows with the same size in the same location as exempt work. Mechanical, electrical and plumbing permits are required for commercial construction, and fire sprinkler and fire alarm permits are separate. DSD also says permit applications and permits expire within 180 days if no proof of work or progress is shown, so time your application to a lease you are ready to sign.

6. Build, inspect and get the certificate

A typical sequence:

1. Demolition and protection of base-building systems

2. Framing and above-ceiling rough-in by the licensed trades

3. Fire protection and alarm work

4. Rough inspections

5. Drywall, ceilings, paint, flooring and millwork

6. Final inspections and the certificate of occupancy

DSD lists building, electrical, mechanical, plumbing and fire inspections as typical before a certificate is issued, plus a Metro Health inspection for some businesses. It says the contractor is responsible for verifying that all required inspections are done and a temporary or full certificate is issued before the business operates. A temporary certificate can allow limited activity such as staff training or equipment installation. If the suite's power was disconnected, DSD says reconnection requires an electrical permit and inspection, after which Development Services notifies CPS Energy.

Commercial tenant improvement timeline: what sets the pace

DSD's permit and plan review pages do not list review timeframes, and no two build-outs run on the same calendar. These items usually decide yours:

• How quickly you get a clear zoning and certificate of occupancy answer

• How complete the drawings are at first submittal

• Comments and resubmittals across building, fire, accessibility and any other discipline that applies

• TDLR registration, which needs the landlord's ownership information

• CPS Energy design work for any new or relocated service

• Lead times on HVAC equipment, storefronts and specialty items

• Landlord review of your drawings under the work letter

Ask your contractor for a written schedule that shows each review, landlord approval and inspection as a milestone, and update it as comments come back.

Lease terms worth negotiating

• A contingency that lets you exit if permits or the certificate of occupancy cannot be obtained for your use

• Rent that starts at a defined milestone rather than on a fixed date

• Clear responsibility for code upgrades triggered by base-building conditions

• Landlord cooperation on TDLR registration and on any CPS Energy easements or service work the build-out needs

Opening a food business

Food businesses add health, grease and hood approvals on top of every step above.

Restaurant Build-Out Timeline in San Antonio: Approvals in Order

A San Antonio restaurant build-out moves through Metro Health review, SAWS grease rules, fire marshal hood permits and the certificate of occupancy. Before you sign a restaurant lease, walk through the restaurant build-out timeline and approvals in San Antonio so the kitchen you plan fits the space you rent.

Next step: have the space walked before you sign

Looking at a space and want a contractor to walk it before you sign? Call (210) 796-3695, request an estimate or book an estimate consultation. 214 Veteran Solutions is a veteran-owned contractor in San Antonio that plans and manages commercial build-outs and coordinates licensed trade contractors for businesses across San Antonio and nearby cities.