tenant improvement allowance

tenant improvement (TI) allowance

A negotiated sum a landlord is willing to spend to customize space for the needs of a particular tenant. For second-generation space—that with walls, doors,ceiling tiles,lighting,and electrical already in place because of a prior tenant—the offered TI allowance will typically be enough to replace worn carpets and wallpaper, paint walls, freshen up some cabinetry, and move a minor number of walls and doors. For first-generation space—brand new space—the TI allowance is often insufficient to complete construction with even the most inexpensive quality of components.Construction expenses in excess of the TI allowance must be paid by the tenant.

References in periodicals archive ?
Onyx Center has space starting at 1,099 square feet for lease and the building features extensive perimeter and site landscaping, high visibility and access to Overland Road, consistent architecture throughout the park, minimum 5/1,000 parking ratio, and a generous $40/sf tenant improvement allowance on first generation space.
First generation space that has never been built out for a tenant will result in the user having to spend additional money above the landlord's tenant improvement allowance to complete the build out.
This individual will have an enormous financial impact on your occupancy rental rate and reducing franchisee start-up costs by negotiating, among other things, an aggressive tenant improvement allowance.
On smaller spaces, where for the past two years I would say it was expected that the landlord would do a whole build to suit a tenant, now landlords are claiming that they want to get out of the construction business and just go back to giving a tenant improvement allowance and letting the tenant build the space themselves.
As part of the agreement, the landlord agreed to divide the floor and deliver a white box with a new bathroom and offered several months of free rent and a tenant improvement allowance.
0% per year, which applies to both the tenant improvement allowance and the replacement reserves.
Since it is unlikely the vacating retailer or landlord will provide a tenant improvement allowance, be leery if significant capital will be required to retrofit the space.
Mangum and Bennion feel that most businesses are best served by a long-term lease of three or more years, which are more amenable to a tenant improvement allowance.
The average tenant improvement allowance was up $6 from the month earlier to $45, the firm reported.
In an effort to retain Clausen Miller, the landlord, Fosun International, provided an attractive tenant improvement allowance to refresh the space and were very cooperative to work with," Peck said.
Because of the limitations imposed by Section 502(b)(6) on a landlord's recovery following a tenants bankruptcy, in the case of a significant tenant improvement allowance where the landlord is obtaining a letter of credit as additional security, landlords may wish to consider an alternate structure for the transaction at the time of lease execution in order to provide a landlord with a greater opportunity for recovery upon a tenant bankruptcy.
In addition to the sales price, Griffin is assuming responsibility for approximately $2 million in future tenant improvement allowance.