Jason....It depends on the term of the lease, the quality of the tenant, the needs for converting a vanilla shell into usable space, and other negotiable items. Generally it is important for a non-credit, national tenant to have as much skin in the game as possible. Therefore, the TI allowance becomes a very important part of a well-balanced lease.
It is good to always have the input of a construction specialist once the extent of the TI is designed. If there is no allowance being given, the tenant may be in a better position to negotiate such concessions as free rent in advance of the beginning the lease term, and/or a better price per square foot.
TI is just one of the cost factors in computing the ROI from a lease, which is critical from a landlord’s perspective.
Onward and Upward....
Oct 28, 2013