What is Tenant Improvement Allowance?
Sometimes you may find a property that may seem perfect. The price is great, the location is even better. The only downfall is that the building is not really suited for your needs. There are certain factors that you may need to consider customizing in order to make it right for you. This is possible!
Tenant improvement, often referred to as TI, is an alteration that building owners make to customize their rental space so that the space is configured to fit the needs of the particular tenant. This is done as part of a lease agreement. During lease negotiations, there is an agreed upon tenant improvement allowance, which is a per-square-foot or total dollar sum that a landlord is willing to spend in order for the tenant to update or renovate the rented space.
What does Tenant Improvement Allowance Cover?
Typically, when a landlord agrees to a tenant improvement allowance, it only covers hard construction costs.This means that things like moving costs and furniture are not included. This is because including such costs would be at a tax disadvantage for the landlord.
Can Tenant Improvement Allowance be Negotiated?
While landlords would always prefer to only cover hard construction costs, or course tenants may often seek to have certain soft costs such as legal fees, permit fees, construction management fees, or even architect or attorney fees included. This is something that could quite possibly be negotiated during lease negotiations. Another thing to consider during negotiation is securing the right to leftover tenant allowance funds for future improvements. Rather than having any leftover money go back to the landlord, it is quite possible to negotiate to keep these TI dollars.
Looking for a construction management company that can handle tenant improvements?
While you may have secured enough tenant improvement allowance to update your rented property to fit your needs, you still need a reliable construction management and contracting company to make these tenant improvements a reality.
Hurd Construction Management is a licensed commercial general contractor serving Florida, Georgia and the Southeast United States. We provide construction project planning, management and delivery for clients primarily in the commercial office, retail, restaurant, medical and multi-family markets.
Our construction methods include both traditional and resource-efficient custom modular construction. We develop full turnkey building solutions tailored for each project’s unique challenges. This means that we can work with you on your tenant improvements and make them customizable to your needs. We can ensure you get exactly what you need when you are considering tenant improvements.
In addition to our core construction management and contracting businesses, we also provide ongoing post-construction facility maintenance and management services. Our broad capabilities, deep experience and efficient approach to commercial building helps our clients save time, money and headaches.
Our mission is to fulfill the demand for high-quality, resource-efficient commercial real estate and construction management services by being a trusted provider of smart, integrated CRE solutions for clients throughout the Southeast United States, and the world.