Do Tenants usually use the TI Allowance to purchase HVAC along with build out of the shell space?

Tenant is asking for a generous TI-Allowance on top of LL providing HVAC System on roof along with lowering base rate...I am the developer and broker and do not think this is fair whatsoever!!
In Leasing Property - Asked by Michael G. - Jul 27, 2012
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Justin C.
Jacksonville, FL

Is this a retail space? If so, we have given $10/SF for a "vanilla" shell, which includes some HVAC (3.5 tons for every 1,400 SF). I have heard that some LLs, locally (Jacksonville, FL), were offing up to $25/SF for TI when delivering a cold-dark shell.
I have mixed feelings about which way is better to go, because while it may appear save the LL money to deliver a cold-dark shell, it also take the tenant more time to open for business and you are asking them to handle matters, that for local shop space tenants, usually aren't equipped to handle.
In the end, I guess it depends on how much you want this tenant. Are they a national that could bring in more traffic and improve your outgoing cap-rate?
Justin Clark, CCIM

Jul 30, 2012
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Chris S.
Coeur D'alene, ID

Life ain;t fair and neither is real estate! Tenants can ask for anything they want, so it really depends on your ability to negotiate a sound transaction. If this tenant wants the world from you and it no longer makes financial sense, then you need to walk away. As a landlord rep I have had to draw it out on paper for prospective tenants ... look here Mr. Tenant, you are asking for $120,000 worth of improvements to this space and you are offering to pay $36,000 in rent over the term of your lease. How do you think this makes sense for Mr. Landlord?

Oct 9, 2012
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