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Tenant improvement Costs


What is included in tenant improvements?

The real estate definition of Leasehold improvements, also known as tenant improvements (TI), are the customized alterations a building owner &/or tenant makes to rental space as part of a lease agreement, in order to configure the space for the needs of that particular tenant. The scope of this work can range from new carpet and paint to the complete build-out of empty shell space. It is important to have a very clear idea of what it costs, and the timelines involved, to design, permit and construct the new improvements for the new space.

What is the average tenant improvement allowance?

The tenant improvement allowance is the amount a landlord is willing to spend/contribute toward the tenant’s costs of retrofitting or renovating the office space. It is usually expressed in a per-square-foot or total dollar sum. This amount is decided upon during lease negotiations, and a Tenant Representative is the perfect person to have on your side in these negotiations because they are aware of what the different landlords are willing to accept to attract or retain your tenancy.

Further, since there are variations in spaces and each tenant’s needs differ, an experienced Tenant Representative is very well versed in putting together the team of individuals required to determine what it will cost & the timelines involved to design, permit and construct your space, taking into account the existing mechanical, electrical and plumbing equipment.