Fit-out capex for Class A office runs USD 80–250/sf depending on market and spec tier; budget by tier (basic / mid / high-end / trophy), amortise into rent only what exceeds TI allowance, and govern with line-item visibility from day one.
TI allowance covers 30–80% of base spec — anything above is tenant capex.
Excess TI amortises into rent at 6–8% — treat it as rent, not free money.
AV/IT and FF&E are routinely under-budgeted by 30–50%.
Permit and build durations push 6–14 weeks beyond design — plan accordingly.
Fit-out Capex
Fit-out capex for Class A office runs USD 80–250/sf depending on market and spec tier; budget by tier (basic / mid / high-end / trophy), amortise into rent only what exceeds TI allowance, and govern with line-item visibility from day one.
TI allowance covers 30–80% of base spec — anything above is tenant capex.
Excess TI amortises into rent at 6–8% — treat it as rent, not free money.
AV/IT and FF&E are routinely under-budgeted by 30–50%.
Permit and build durations push 6–14 weeks beyond design — plan accordingly.
What this is
Fit-out capex is the one-time capital cost of converting landlord-delivered shell space into a tenant-ready workplace. It spans demising, MEP, ceilings, finishes, AV/IT, FF&E (furniture, fixtures, equipment), branded zones, and consultants. In a Class A market, fit-out capex routinely exceeds the first year of rent. The right governance question is not 'what does it cost?' but 'how is the spec tiered, how is TI allocated, what excess amortises into rent, and how do we hold the budget once construction starts?'
The four spec tiers
Class A fit-out costs range over a 4–5x band depending on spec. The standard tiers: (1) Basic — landlord-grade plasterboard, vinyl floor, building-standard light fixtures, IKEA-tier furniture (USD 80–120/sf); (2) Mid — real flooring, glass demising, branded reception, mid-tier task chairs (USD 120–180/sf); (3) High-end — bespoke finishes, branded social spaces, architectural lighting, premium furniture (USD 180–250/sf); (4) Trophy — bespoke joinery, art programme, AV-saturated, sub-floor F&B, executive bathrooms (USD 250–400+/sf). Pick the tier in the LOI, not after design starts.
TI allowance and the amortisation trap
Tenant improvement allowance (USD 80–150/sf typical for US Class A 7–10 year, USD 150–250/sf for trophy) covers most of base/mid spec. Anything above the TIA becomes tenant capex (cash) or amortises into rent at 6–8% — and amortised TI is contractually rent for the full term, even on early termination.
The trap: spending USD 200/sf with USD 100 TI allowance and amortising the excess looks like a USD 14/sf/year rent uplift. Over 10 years that is USD 140/sf — a 40% overrun on the 'free' fit-out. Always model excess-TI amortisation as rent in your effective-rent comparison.
AV/IT and FF&E: the under-budgeted lines
AV/IT (audiovisual, cabling, network, video conferencing, room booking) and FF&E (furniture, fixtures, equipment) routinely come in 30–50% over budget on Class A fit-outs. The two reasons: AV is specified late (after design freeze) and FF&E is procured by office managers without quantity-surveyor discipline.
Lock both early: get a benchmark estimate from the AV consultant at design intent, run a competitive bid for FF&E packages (not single items), and require quantity-surveyor sign-off on every variation order > USD 25,000.
Programme: design, permit, build
Class A fit-out duration: 8–12 weeks design, 4–10 weeks permit (jurisdiction-specific — NYC adds 8–12 weeks via Department of Buildings; London adds 6–10 weeks via Building Control; Tokyo and Singapore are faster), 12–20 weeks build for a typical 30,000–80,000 sf fit-out. Total: 6–10 months from go to occupancy. Trophy spec adds 4–8 weeks.
Plan move-in 2–3 weeks after construction completion to allow snagging, FF&E delivery, AV commissioning, and IT install. Day-one occupancy is achievable but requires a 4-week parallel commissioning window.
Procurement: contractor selection and contract type
For Class A fit-outs, the dominant contract is GMP (guaranteed maximum price) with shared savings — gives the contractor fee certainty and the tenant cost certainty. Lump-sum is faster to bid but transfers all variation risk to the tenant. Cost-plus is rare for fit-out and only appropriate where the design is genuinely incomplete at signing.
Run three contractors through pre-qualification, two through full bid. Insist on transparent open-book pricing and a contingency pool the tenant controls (typically 5–8% of construction cost).
Sustainability and embodied-carbon
Fit-out is the dominant tenant-side embodied-carbon line. Re-use existing partitions and ceilings wherever possible, specify low-carbon concrete and steel, prefer FSC-certified timber over mineral materials, refurbish furniture (Form Furniture, Rype Office, etc.) instead of buying new.
A 30–50% embodied-carbon reduction is achievable on a Class A fit-out today without spec compromise — and increasingly required for tenants reporting under CSRD or science-based targets.
Governance: line-item visibility from day one
The single most useful capex governance discipline is line-item visibility. Require the cost plan structured as: shell-condition baseline, base build, MEP, AV/IT, FF&E, branded zones, consultants, contingency. Refuse aggregated subtotals. Run weekly cost reports against this structure throughout construction; require contractor sign-off on each line.
Decision aid
If you are sizing fit-out capex today: pick the spec tier in the LOI, model excess-TI amortisation as rent in your effective-rent comparison, lock AV/IT and FF&E line items at design intent, contract on GMP with shared savings, and require structured line-item cost reporting from week one of construction.
Frequently asked questions
Is the TI allowance free money?
Up to the cap, yes. Above the cap, excess amortises into rent at 6–8% — and is owed even on early termination unless explicitly carved out.
How much should I budget for AV/IT?
USD 25–60/sf for a Class A fit-out, depending on conferencing density and trading-floor or lab content.
Lump-sum or GMP contract?
GMP with shared savings is the Class A default — gives both sides cost certainty without forcing a fully-frozen design before signing.
How long does a Class A fit-out take?
6–10 months from go to occupancy. Trophy adds 4–8 weeks. NYC and London add 6–12 weeks via permit.
Can I reduce embodied carbon without compromising spec?
Yes — 30–50% reduction is achievable through re-use, low-carbon materials, and refurbished furniture.