TI Allowance (Tenant Improvement)
Category: business
A sum of money provided by the landlord to the tenant to help pay for customizing the rented space.
TI is the "build-out budget." If a law firm rents a bare concrete floor (a "shell"), the landlord might offer $50 per square foot in TI to help them build walls, install carpets, and run data cables. It is a major negotiating lever in commercial leases.
Common Examples
- We negotiated a $100,000 TI Allowance to cover the specialized plumbing required for the new dental clinic.
- The landlord offered a higher TI Allowance in exchange for the tenant signing a longer, 10-year lease commitment.