What type of capital expenditure might involve renovating a space for a new tenant?

Renovating a space for a new tenant typically involves adapting or creating office spaces that meet the specific needs of that tenant. This process often encompasses a variety of modifications, such as installing new partitions, reconfiguring layouts, or enhancing aesthetic features. These renovations aim to make the space functional and appealing according to the requirements of the incoming tenant, which can include creating offices tailored to specific business operations.

This choice distinguishes itself from others in that major system replacements or updates of mechanical equipment focus more on the infrastructure or systems that keep a building operational, rather than the tenant-specific modifications of the interior spaces. Similarly, constructing additional units generally refers to expanding the building's capacity rather than adapting existing spaces for a new tenant. Thus, building offices directly relates to creating customized environments for tenants, which is essential in property management when acquiring new leases.