Are tenant improvement charges added to the gross rent in a commercial lease?

In Leasing Property - Asked by Richard B. - Aug 28, 2015
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Answer(s)

Sandy I.
Property/Asset Manager
Pittston, PA

Yes, typically we amortize the improvement costs, plus interest, over the lease term. Be careful not to amortize the costs over any option period(s). Remember, it's the tenant's option not the landlord's.

Aug 28, 2015
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Ronnie M.
Developer
Houston, TX

No. TI is typically considered as a concession or incentive to secure the tenant and not added back into the rent as a recoverable cost. That said, total lease costs , TI and LC (leasing commissions) should be factored into when arriving at a rental rate to ensure sufficient return on investment.

Aug 31, 2015
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