A tenant improvement, or TI, is the construction work that turns a leased commercial unit into your business. As a tenant improvement contractor in Calgary, we handle the whole job: the walk-through before the lease, the design, the City of Calgary permits, the engineered drawings and the construction itself. Almost every sector we build, from clinics to cafes, starts as a TI. The single best piece of advice we can give: call a contractor before you sign the lease.
A landlord's TI allowance almost never covers the whole fit-out
The landlord's tenant improvement allowance and the actual cost of your fit-out are two different numbers. The allowance is negotiated as part of the lease, usually a dollar figure per square foot, and it reflects the landlord's leasing goals, not your floor plan. It is common for the allowance to cover a fraction of a specialty fit-out.
The mistake we see most often goes like this. A tenant signs the lease, takes possession, hires a designer, and only then gets construction pricing. By then the rent-free period is running, the allowance is fixed, and the only way to close the gap is to cut scope or find more money.
If we are involved before you sign, the gap becomes a negotiating point instead. A planning budget lets you ask for a larger allowance, a longer free-rent period, or for the landlord to do specific base-building work, such as upgrading the electrical service or bringing a sanitary line into the unit. Early contractor involvement also reduces redesign and delay later, because the design starts from what the shell really is.
If your TI allowance covers the whole job, read the lease again. It almost never does.
Landlord's work, tenant's work and the work letter
Most commercial leases include a work letter, or a schedule of landlord's and tenant's work. It sets out what the landlord delivers and what is yours. Read it closely, because the terms are not standard:
- Base building or shell: the structure, the roof, a demising wall and a capped service connection. Sometimes only that.
- Vanilla box: a shell with a finished ceiling, basic lighting, a washroom, HVAC distribution and painted walls. Definitions vary from landlord to landlord.
- Landlord's criteria: rules for your work, such as approved contractors, insurance limits, hours for noisy work, roof access, storefront and signage standards, and drawing approval before you apply for a permit.
On our walk-through we check the work letter against what is physically there. A vanilla box with a 100-amp panel is a very different starting point for a clinic or a restaurant than one with 400 amps.
Calgary permits for tenant improvements
These are the rules that decide your permit path:
- A building permit is required whenever a commercial interior is altered. New walls, plumbing, mechanical, electrical and ceiling changes all count.
- Most TIs do not need a development permit, unless the work changes what the existing development permit approved.
- A Change of Use development permit is required when the business use changes, for example from retail to medical, or from office to restaurant. It comes before the building permit and adds its own review time, so it has to be in the schedule from day one.
- Anything structural, life-safety or mechanical has to be on drawings stamped by a professional engineer, as the Alberta Safety Codes require.
- Quick-release permits are available for some simple scopes: demising walls, removing interior partitions, and office interior renovations.
We prepare the building permit and any Change of Use application, coordinate the engineers, respond to the City's review comments and book the inspections. The City's own guidance is on calgary.ca.
What does a tenant improvement cost in Calgary?
Planning ranges for Calgary tenant improvements as of 2026. Scope, the shell and the finishes move a project around inside each band.
| Type of TI | Planning range (as of 2026, varies by scope) |
|---|---|
| Light (paint, flooring, minor partitions, lighting) | $120–180 per sq ft |
| Medium (new layout, washrooms, HVAC changes) | $180–260 per sq ft |
| Retail | $150–300+ per sq ft |
| Medical or dental | $200–400+ per sq ft |
| Specialty (restaurant, lab and similar) | $300–500+ per sq ft |
What moves a TI up its range is the mechanical work the shell cannot support: extra plumbing fixtures where no line exists, a larger electrical service, new rooftop units, or more sprinkler heads for a new ceiling layout. Finishes matter, but they rarely double a budget. Services do.
How a tenant improvement project runs
- Walk-through and planning budget before the lease, with the work letter in hand.
- Design of the layout, finishes and engineering, with our estimators involved as it develops.
- Landlord approval of the drawings, if the lease requires it.
- Fixed price, once the drawings are complete.
- Permits, including Change of Use if needed.
- Construction: demolition, rough-in, inspections, close-in, finishes.
- Final inspections and occupancy, then handover with warranties and manuals.
Two things often decide the schedule more than the construction itself: whether a Change of Use is needed, and the lead time on electrical gear and rooftop units. We find both on the first walk-through.
Working in an occupied building
Most TIs happen in buildings that are already open, with neighbours on both sides and a landlord who wants the common areas quiet. In a downtown tower, that means booking the freight elevator, protecting lobby finishes and working around building hours. In a strip mall, it means keeping the parking lot clear for the tenants beside you and doing noisy demolition at agreed times. We plan this with the property manager before we start, because a complaint from the tenant next door can stop a job faster than an inspector.
Sector-specific fit-outs
Every sector adds its own equipment and code items on top of the TI basics. See the details for restaurants, offices, retail stores, medical and dental clinics and salons, or browse all commercial construction services.
Tenant improvement questions
Should I get construction pricing before signing a lease?
Yes. The lease is the one point where the allowance, the free-rent period and the landlord's work are still open to negotiation.
Does my tenant improvement need a building permit in Calgary?
Yes. Any alteration to a commercial interior needs a building permit. Some simple scopes, such as demising walls, removing interior partitions and office interior renovations, qualify for the City's quick-release permits.
When do I need a Change of Use development permit?
When the business use of the space changes, for example from retail to medical, or from office to a restaurant. It has to be approved before the building permit is issued, so build it into the schedule from the start.
How much does a tenant improvement cost per square foot?
As of 2026, Calgary planning ranges are about $120 to $180 per square foot for a light TI, $180 to $260 for a medium one, and $200 to $400 or more for medical and dental. Specialty spaces such as restaurants run $300 to $500 or more. Your shell and scope decide where you land.
Can I use my own contractor if the landlord has a preferred list?
It depends on your lease. Many landlords allow any contractor that meets their insurance and approval criteria, while some require an approved list for certain trades, such as roofing or fire alarm work. We review the landlord's criteria during the walk-through.