How Tenant Improvements Differ from Ground-Up Projects (and Why It Matters)
Not all commercial construction projects are created equal. In fact, one of the biggest distinctions in the industry is the difference between ground-up construction and tenant improvements (TI). These two project types involve very different scopes, timelines, and planning requirements—and understanding the difference is key to managing expectations, costs, and deliverables.
If you’re a business owner, property developer, or investor in North Texas, knowing which approach applies to your project—and how your general contractor will manage it—can help you avoid surprises and align your vision with what’s truly possible.
Tenant improvements (often called build-outs or leasehold improvements) involve modifying an interior space within an existing building to fit a tenant’s specific needs. These projects typically occur in retail centers, medical plazas, office buildings, or flex warehouses where the structure already exists.
Examples include converting an empty retail suite into a boutique or café, building out a dental office inside a warm shell space, customizing a warehouse into a high-tech distribution hub, or adding exam rooms, reception areas, and equipment hookups for a veterinary clinic.
TI projects are generally faster and more affordable than ground-up construction, but they come with their own set of challenges. Because the core structure already exists, you’re often working around existing HVAC systems, plumbing, structural walls, or fire suppression components. A skilled general contractor is essential for managing these complexities and ensuring code compliance.
Ground-up construction is exactly what it sounds like—starting from an empty lot and building everything from the ground up. This type of project includes all site work, utility installation, foundation pouring, framing, roofing, and full interior build-out. Ground-up projects are more complex and typically take longer due to the number of phases involved.
Common ground-up examples include standalone retail buildings, new office complexes, self-storage facilities, and large-scale pet resorts or veterinary hospitals built on newly acquired land.
One of the key differences with ground-up projects is the level of control. Since you’re designing the structure from scratch, you can tailor every aspect to the intended use—from floor plan layout to structural load-bearing capacity and future expansion. However, that level of customization also brings a higher price tag, extended permitting timelines, and more layers of coordination.
Permitting is another area where TI and ground-up diverge. Tenant improvement permits are often quicker to obtain, especially if the scope is limited to interior work and doesn’t affect structural components. Many municipalities in North Texas even offer expedited review processes for TI work. Ground-up projects, on the other hand, may require zoning approvals, site plan reviews, environmental assessments, utility coordination, and more.
Budget is always top of mind for owners, and the type of project directly influences where the dollars go. With TI, you’re typically investing in finishes, flooring, partition walls, lighting, and electrical configurations. In ground-up construction, a much larger portion of the budget goes into site prep, structural materials, and infrastructure.
Choosing between TI and ground-up comes down to several key factors: time, cost, location, and long-term needs. If a suitable existing shell space is available, TI can offer a faster and more cost-effective path to opening your business. But if you need something highly specialized, or if location and layout flexibility are top priorities, ground-up may be the smarter long-term investment.
From a contractor’s standpoint, both project types require strong coordination with architects, engineers, city officials, and subcontractors. But the nature of the coordination changes. In a TI, the contractor must often adapt plans to what already exists and troubleshoot unexpected site conditions—like buried conduit or outdated mechanical systems. In a ground-up, the contractor has more control, but also greater responsibility for everything from site drainage to utility tap-ins.
At Texas Built Construction, we’ve managed both tenant improvements and ground-up projects across North Texas. We help clients weigh their options early, offering preconstruction consulting to identify hidden costs and streamline timelines—whether it’s a high-end retail build-out in Addison or a veterinary clinic starting from scratch in Frisco.
If you’re not sure which path is right for your next project, bring your general contractor into the conversation early. With the right guidance, you can avoid surprises, stay on budget, and build a space that works for you—now and in the future.
Email us today @ projects@txbuiltconstruction.com or call us @ (972) 219-0729.