renovating a space for a future tenant

[David Wolber]

Hey BP!! A few things first: This is my first post about my first (only) commercial property with regards to our very first perspective tenant. Yup, that new…

ANYWAY, I’m looking for advice on an idea I have about renovating a space for a future tenant.

We have a commercial space with 4 offices sharing a shared waiting room.One of which my business partner (and wife) operates her therapy practice out of.

We were approached by an established massage therapy practice who is interested in renting all three offices.

My wife doesn’t feel like she wants to be the only metal health therapist in HER building. She had an idea about a collaborative environment for other therapists.

We also have 800 sqft of area on the 2nd floor that hasn’t been fixed yet and therefore no CofO for that area, but could be renovated and obtained in under two months and about 10k in expenses.  It could be improved to be two additional offices very easily.

Is it a good idea to offer to renovate the space FOR them in exchange for a longer lease and higher rent? My idea would be to amortize my expenses in a two year lease.

Also, since we only just finished the renovations on the first floor, we are very cash poor currently and would have to finance the cost of the improvements.

Is there a better way to do this? Is this a terrible idea? Please advise.

THANKS!!!

Dave