tenant improvements
10 years ago No Comments

(pronounced TEH-nent im-PROOV-mehnts)

This is a commercial real estate term that is commonly abbreviated as “T.I.” (not to be confused with the nickname for Texas Instruments) and also referred to as “Leasehold Improvements.” No matter what you call it, these are the upgrades made to a leased space either by or for a tenant who will be in that space. Particularly in new building, part of the negotiations will generally include some sort of detail about the improvements that are to be made by the landlord. That particular part of the negotiation is usually called a Tenant Improvement Allowance or a Work Letter. This document defines the fixed amount of money contributed by the landlord toward tenant improvements, and if any of the costs exceed this amount, the tenant will have to pay them. (FYI: The amount of money available for improvements is referred to as Tenant Finish Allowance.) T.I., T.I. Allowances, and Work Letters are all a part of T.D., or Tenant Development work. Many design firms specialize in T.D., working directly for commercial landlords, real estate brokers, and property management companies. It may not be glamorous, but it’s big business!