Turnkey Buildout

In a turnkey buildout, the landlord takes full responsibility for building out the space — designing, permitting, funding, and completing the improvements — and hands the tenant finished, move-in-ready space at an agreed rent. This differs from a tenant improvement allowance, where the landlord contributes a set dollar amount and the tenant manages the construction and bears any overage. Turnkey shifts the risk of cost overruns and construction delays to the landlord, which appeals to healthcare tenants who lack the time or expertise to manage a complex medical buildout. The trade-off is control: because the landlord runs the project, the tenant has less say over finishes, contractors, and specification unless these are carefully defined up front. For a turnkey deal to work, the tenant must document exactly what ‘finished’ means — a detailed scope, plans, and specification for operatories, plumbing, electrical, and finishes — so the delivered space actually meets clinical needs. Turnkey is most attractive for standardized buildouts; highly specialized spaces like an ambulatory surgical center often need tenant control and a TI allowance instead.

A turnkey buildout shifts construction cost and delay risk to the landlord, but reduces the tenant’s control. Documenting the scope and specification precisely is what ensures the finished space meets clinical needs.

A landlord offers a dental practice a turnkey buildout: the landlord designs and constructs three operatories, a sterilization area, and a reception space to the practice’s specification, delivering finished space at $34/sq ft — with no construction risk to the tenant.