Tenant Improvement (TI) Allowance
A tenant improvement allowance is a dollar amount or per-square-foot contribution a landlord provides to the tenant to fund build-out of leased space, typically credited against rent or paid directly upon completion.
What it means
TI allowances are common in office, medical, and specialty retail leases where tenants need custom build-out. Typical TI allowances range widely: $10–$50/SF for general office, $50–$100+/SF for medical and lab space, with higher amounts negotiated for longer lease terms and larger square footage.
The landlord recoups TI through rent over the lease term — higher TI typically justifies higher base rent. TI allowances are typically disbursed against invoices for completed work, not as cash at lease commencement.
Related terms
Keep reading