Design-Build vs Design-Bid-Build for Tenant Improvements: Which One Fits Your Lease Timeline?

Did you know that over 70% of commercial tenant improvement projects using traditional delivery methods finish late or cost more than expected? For tenants and small businesses, your choice of project delivery method could make or break your move-in date, disrupt your cash flow, or even affect whether you can brand your new workspace on schedule

Startling Facts About Design Build Tenant Improvement Approaches

Over 70% of tenant improvement projects run over schedule using traditional methods.
Commercial tenant improvement costs can increase by 15% due to plan changes in design-bid-build.
In DTLA, permit lead times for tenant improvements can vary by weeks depending on method.

What You’ll Learn in This Guide to Design Build Tenant Improvement

Key differences between design build tenant improvement and design-bid-build for commercial tenant improvement
Which delivery method best aligns with your tenant improvement lease timeline
Strategies for project management, red flags, and critical questions to discuss with your contractor, project manager, or landlord

Quick Definitions: Design Build Tenant Improvement vs Design-Bid-Build

What Is Design Build Tenant Improvement?

Design build tenant improvement is a single-contract project delivery method where one unified team (typically a design-build contractor) handles both the design and construction phases of your commercial tenant improvement project. This means you—whether you’re the tenant, property manager, or commercial real estate owner—work with one main point of contact for everything from initial scoping to final walk-through. This approach is increasingly popular for leasehold improvement because it promotes fast-track scheduling, straightforward project management, and fewer change orders. For TI projects, it can minimize finger-pointing between designers and builders, which historically leads to delays and budget surprises.

What Is Design-Bid-Build for Tenant Improvement Projects?

Design-bid-build, the traditional method, separates design and construction: first, an architect or designer drafts detailed plans; next, those plans go out for bidding by potential contractors; finally, the winning contractor builds to spec. While this model offers more control and potential customization for the commercial tenant, it’s prone to longer project timelines and budget drift—especially if building codes, landlord requirements, or unforeseen site issues require plan revisions. This setup is still common for complex tenant improvement projects needing extensive engineering or unique finishes—but can expose you to more risk if not managed tightly.

Leasehold improvement
Commercial tenant
TI projects
Tenant improvement project

Why Your Delivery Choice Matters for Tenant Improvements

Impact of Delivery Method on Leasehold Improvements and Timeline

Choosing between design build tenant improvement and design-bid-build can dramatically affect your leasehold improvement—especially your project’s speed, cost, and adaptability. In fast-paced commercial real estate markets like DTLA, a single missed permit inspection or change order can push your occupancy date by weeks and trigger extra rent or operational expenses. Design build models often allow earlier permitting and construction starts because architecture, engineering, and build-out can proceed in parallel rather than in strict sequence. By contrast, design-bid-build is sequential: design must fully complete before any bids or construction begin, extending the project timeline and potentially stalling fit-out until all design bumps are finalized.

Budget, Scope, and Risk in Improvement Projects

Budget and risk profiles differ sharply between the two models. In design build, budget control is typically tighter: you receive unified proposals, fewer change orders, and streamlined communication. But changes mid-project may still add cost if the scope grows (think: custom conference rooms or new AV systems). In design-bid-build, splitting design and build contracts often means more “gaps”: the contractor can submit change orders for discrepancies or overlooked details in the plans, increasing both cost and friction. For both methods, missed inspection windows or delays in landlord approval can derail your timeline and blow your improvement allowance, especially for commercial tenant improvement in dense urban markets.

“A missed inspection window in DTLA can add weeks to a commercial tenant improvement project timeline.”

Step-by-Step: How Design Build Tenant Improvement Works

Key Phases in a Design Build Tenant Improvement Project

Project scoping and commercial tenant consultation: Your team and your design-build contractor collaborate early to define requirements, budget, and vision for your new retail space, office building, or service business.
Design phase – single team handles drawings and engineering: Architectural drawings, engineering for building systems, and code compliance documentation are all done in-house (often overlapping with client input and early permit work).
Permitting, code compliance, and logistics for tenant improvement: Because logistics are hammered out as part of design, your permits can often be filed faster—vital for commercial real estate in metro areas like DTLA, where inspection windows are tight.
Construction and timeline management: With one accountable team, quality control and scheduling are typically more predictable, reducing risk of late move-ins or over-budget build-outs.

Who’s Involved in a Design Build Commercial Tenant Improvement?

In a design build tenant improvement project, your single contract covers both the creative (architectural) and practical (construction) experts—usually assembled by the general contractor (GC) as a dedicated team. This team might include architects, interior designers, engineers, project managers, and specialist subcontractors, all working together from the start. The commercial tenant—whether you run a retail space or a growing tech firm—collaborates directly on project goals and design choices, with the design-build firm serving as both project quarterback and daily point of contact. This blended “design and construction management” model cuts delays and costly miscommunication common to traditional improvement projects.

Step-by-Step: How Design-Bid-Build Works for Tenant Improvement Projects

Main Stages in a Design-Bid-Build Tenant Improvement Project

Hire architect/designer separately for tenant improvements: The tenant (or building owner) secures an architect who develops detailed construction documents to the client’s spec.
Send plans for bid – longer project management cycles: Completed plans are released for competitive bidding by general contractors—a process that can add weeks to your project timeline in hot markets or large office building complexes.
Hire contractor – can result in change orders: The winning GC (general contractor) takes over project management, but gaps or unclarities in the plans almost always create change orders that can increase both timeline and cost.
Construction and project oversight: The original architect typically performs site visits and punch lists, but the split roles introduce more handoffs and more risk for communications breakdown or missed building codes.

Project Management Challenges Unique to This Method

Design-bid-build requires tight project management on the tenant/client side because it involves separate contracts and handoffs across teams. If the initial design does not fully address code compliance, unique building systems, or landlord requirements, you face more change orders and potential work slowdowns mid-phase. In dense urban environments—where after-hours access, freight elevator time, and fire/life-safety systems add procedural layers—this model can dramatically slow delivery and increase risk. Proactive coordination and very clear communication are non-negotiable. Just one missed approval from a building owner or fire marshal can pause a tenant improvement project for days or even weeks.

Comparison Table: Design Build Tenant Improvement vs Design-Bid-Build

Delivery Method	Number of Contacts	Timeline Impact	Typical Costs	Flexibility	Best For
Design Build Tenant Improvement	Single point of contact (GC-led team)	Fastest—design and construction overlap for quicker timeline	More predictable; fewer change orders; risk contained	Moderate—may be less suitable for deep custom work	Short lease windows, fixed budgets, straightforward TI projects
Design-Bid-Build Tenant Improvement	Separate (designer/architect, GC, subs, owner)	Longer—design must fully complete before bidding/build	Can escalate with multiple bids, more change orders, scope drift	Maximum—good for unique or highly customized spaces	Complex creative projects, heavy engineering, rich finishes

Field Notes: DTLA Realities for Commercial Tenant Improvements

Permit logistics and lead times for tenant improvement projects
After-hours work rules downtown
Coordination with landlord project management teams
Material and access delays

In downtown Los Angeles (DTLA), permit acquisition, after-hours work regulations, and logistics can shift your improvement project timeline by weeks. Building offices may require advanced scheduling for elevator access, and after-hours construction demands extra coordination (and often premium costs). Landlord review cycles, restricted parking, material deliveries in congested areas, and coordination with in-house project management teams all play a huge role in how efficiently your tenant improvement proceeds. Savvy tenants and brokers clarify these realities in advance—ideally before lease execution—to avoid “surprise” delays during your commercial tenant improvement build-out.

Which Method Fits Your Improvement Project?

Short Lease Timeline: Design Build Tenant Improvement Advantages

If you must complete your tenant improvement project fast—say, with just a few months between lease signing and move-in—design build is often the only practical approach. The integrated team model means design and permit tasks can start as soon as rough scope and test fits are agreed, and construction mobilizes while the last details are still being finalized. Especially in competitive office or retail markets, a design build team can break ground and adapt as landlord requests or inspections come in, keeping your opening (and revenue) date intact. For out-of-town owners or expanding brands, this model also streamlines decision-making, as all communication and accountability flows through a single project manager.

Extensive Customization: When Design-Bid-Build Makes Sense

If your improvement project requires high-end design, complex engineering, or detailed branding—think: custom millwork, lighting scenes, experiential retail, or branded office space—a design-bid-build approach allows your architect or design team maximum freedom and iterative design refinement before the build begins. This model is preferred for flagship locations, specialty building systems, or when your brand identity hinges on a unique look and feel. The tradeoff: longer timelines, more contractors to herd, and increased risk of scope changes or cost overruns. A robust project management team is critical.

Red Flags: When Either Method Can Go Off Track

Both models have risk points. For design build, beware of “lowest bid” vendors who deliver generic finishes that may not match your expectations—always check references and recent TI project portfolios. For design-bid-build, lack of communication between architect and contractor can mean more change orders, missed building codes, or confrontation over site conditions and improvement allowance. In both, unclear roles, delayed landlord responses, or slow permitting (especially in metro areas like DTLA) can grind progress to a halt. Address these items up front in your contracts and kickoff meetings.

Questions to Ask Your GC/PM/Landlord Before Starting a Tenant Improvement Project

What project management system do you use?
How do you handle permit delays and inspections in our metro area?
Who is responsible for addressing change orders or cost overruns?

Key Takeaways

Design build tenant improvement often streamlines coordination and timeline, especially in fast-moving markets
Design-bid-build offers detailed design control but can delay your improvement project
Always clarify roles, costs, and timelines with your project management team
Stay aware of urban constraints to manage tenant improvements efficiently

Design Build Tenant Improvement FAQs

How much faster is design build tenant improvement versus design-bid-build?
Design build approaches can shave weeks—or even months—off a project, by overlapping the design and construction steps, securing earlier permits, and cutting bid delays. The actual speed depends on local code enforcement, project complexity, and team experience.
What are the biggest risks associated with commercial tenant improvement?
Top risks include uncoordinated plans (especially in design-bid-build), missed inspections, incomplete drawings, delayed landlord approvals, and mid-project scope changes. Early diligence, clear contracts, and robust project management help manage these issues.
Does the landlord or tenant pay for improvement projects?
Usually, payment is negotiated in your lease. Landlords may offer a tenant improvement allowance covering part or all of the work; above-allowance costs often fall to the tenant. Always clarify this up front.
What is included in tenant improvements versus landlord work?
Tenant improvements typically cover space-specific finishes, walls, and systems the tenant needs (lighting, offices, flooring). Core building systems, base building code upgrades, or common area work usually remain under landlord responsibility, unless negotiated differently.

Whether you choose design build tenant improvement for speed or design-bid-build for creative control, understanding the differences can help you avoid delays, manage risks, and deliver your commercial space on time and on budget.