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.
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.
LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.
Ask a question to get advice from brokers, investors, professionals and local experts.
Answer questions to raise your visibility as a trusted advisor and build new relationships.