Tenant Improvement Allowance: The Leasing Incentive You Can’t Afford to Miss
By Chris Rohrer, Broker | Rokos Advisors
In today’s evolving leasing market, one thing is clear: landlords are stepping up their incentive game to attract tenants. One of the most valuable tools in your negotiation toolkit? Negotiating the best landlord cash allowance to construct your space.
A Tenant Improvement Allowance is a financial incentive offered by landlords to help cover the cost of building out or customizing a leased space. But not all TI packages are created equal — and negotiating the right one can significantly impact your bottom line and your space’s functionality.
Here’s what every business leader needs to know:
Push for Full Coverage of Construction Costs
Your TI allowance should go beyond cosmetic upgrades. Whether you’re adding private offices, conference rooms, or upgrading systems, negotiate for a package that covers 100% of your construction needs in addition to the building system components.
Request a Building Construction Package
Many tenants overlook the importance of having a base building construction package provided by the landlord. This includes essential components like HVAC, lighting, and electrical infrastructure. Securing this as part of your deal can reduce out-of-pocket expenses and streamline the build-out process. Landlords will try to keep those things on your side of the ledger leaving you less for the things you’ll actually see.
The Market is in Your Favor — Use It
Landlords are facing more competition than ever to secure long-term tenants. As a result, we’re seeing historically high TI allowances and other leasing incentives. But here’s the catch: those numbers don’t always come easy. It often takes savvy negotiating to secure a deal that truly works for you.
In many cases, one building will have a significant cost advantage over another simply because they already have the base building items in place or they have interior improvements in the space you are considering that you can repurpose. The more you can repurpose, the better opportunity you have to both make your space but also secure a lower rent.
At Rokos Advisors, we help businesses navigate these negotiations every day. Whether you’re relocating, renewing, or rightsizing, securing the right TI package can set the foundation for a workspace that works for your team — and your budget.
Wondering how to get the most out of your next lease? Connect with Rokos Advisors for a customized strategy—let’s secure a TI package that builds real value for your business.
Rokos Advisors is an award-winning Minneapolis - St. Paul based commercial real estate/tenant representation firm specializing in helping businesses find the perfect office or industrial space for their company.