What Is TI Allowance (Tenant Improvements)?

What Is TI Allowance (Tenant Improvements)?

When a tenant asks about TI allowance, they usually want to know who pays for the build out. The best help comes from a commercial real estate agent who negotiates leases often and who knows what landlords in Rochester typically offer. TI stands for tenant improvements, and it can cover costs like walls, flooring, lighting, restrooms, and HVAC changes. A common mistake is treating TI as “free money” without reading the rules. Another mistake is signing a lease without a clear scope of work and a clear timeline.

A TI allowance is a dollar amount the landlord contributes toward improving the space for the tenant. If the landlord delivers a vanilla shell, TI often matters even more because the tenant starts from scratch. Some landlords pay a set amount per square foot. Others reimburse actual invoices up to a cap. Many landlords tie TI to lease length, so a longer term can earn a larger allowance. Tenants should ask how the allowance pays out, when the landlord releases funds, and what happens if costs run over. They should also ask whether the allowance can cover soft costs like design, permits, and project management. In some deals, a tenant takes a higher allowance but pays higher rent, so the tenant should compare the total cost over the full term. Tenants also need to confirm who owns the improvements at the end of the lease and who maintains special systems after the build out.

TDG Commercial RE helps Rochester tenants make TI a smart part of the deal, not a surprise. As one of the best commercial real estate agents in Rochester for lease negotiation, the team compares TI offers across commercial real estate for lease near me and explains the tradeoffs in plain language. TDG Commercial RE also helps clients build a realistic budget and pushes for clear language on scope, approvals, and deadlines, so opening day stays predictable. Clients who search commercial real estate agents near me get direct support on landlord proposals, contractor bids, and change order risk. That hands on guidance helps tenants secure space that fits their brand and protects their cash flow from day one.