Turnkey Buildout
A turnkey buildout (also called a 'landlord build-out' or 'build-to-spec') is a lease arrangement in which the landlord hires and manages the contractor, builds the space according to the tenant's approved plans, and delivers it ready for business operations. The tenant receives the keys to a finished space without managing construction. In contrast to a TIA arrangement where the tenant manages the buildout and gets reimbursed, a turnkey deal shifts all construction risk and management to the landlord.
Updated July 18, 2026
Key Facts
- 1Turnkey deals are more common in larger retail centers, franchise buildouts, and markets where landlords are competing aggressively for strong tenants
- 2The risk of a turnkey deal for tenants: the landlord controls contractor selection and quality standards — tenants have less control over materials, finishes, and timeline than in a self-managed TIA buildout
- 3Turnkey buildouts typically come with longer lease terms (7–10 years) since the landlord is absorbing the full construction cost and needs the lease term to recoup the investment
Turnkey vs. TIA: Which Is Better for Tenants?
The right answer depends on the tenant's experience and appetite for construction management. A TIA buildout gives the tenant control — you choose the contractor, manage the timeline, and own every decision about quality and finish level. A turnkey buildout removes that burden but also removes that control.
For first-time business owners without construction experience, a well-structured turnkey deal with a reputable landlord can be less stressful and lower-risk than managing a buildout independently. For experienced operators with strong teams, a TIA is usually preferable — the reimbursement amount is negotiable, and controlling contractor selection typically produces better quality at lower cost.
Negotiating Turnkey Provisions
- Get the finishes and specifications in writing — 'landlord standard' can mean very different things without a written spec sheet
- Negotiate a tenant improvement schedule with milestone dates and opening date guarantees before signing
- Clarify who pays for upgrades beyond 'landlord standard' — typically tenant pays for upgrades, priced as change orders
- Confirm warranty responsibilities — who fixes defects discovered after occupancy?
- Request the right to approve the general contractor the landlord selects
Frequently Asked Questions
Can I request specific materials in a turnkey buildout?
Yes, within limits. Most landlords work from a 'landlord standard' spec sheet for finishes. You can typically upgrade materials at your own cost (the overage beyond landlord standard). Get the upgrade pricing in writing before signing the lease — upgrades negotiated during construction are marked up significantly.
What if the turnkey buildout is delayed?
This is the key risk in turnkey deals. If the landlord delays, you can't open — and you may still owe rent from the agreed commencement date. Negotiate a rent-free period tied to actual delivery of the space, not the lease start date, and include a penalty or extension provision for landlord-caused delays.
Is a turnkey buildout the same as 'plug and play'?
Not exactly. 'Plug and play' usually refers to a pre-built space that's already finished and ready to occupy with minimal changes. A turnkey buildout is built specifically for your use case, from a shell or prior tenant condition. 'Plug and play' spaces are available immediately; turnkey buildouts require a design and construction period.