A tenant improvement allowance is the money a landlord contributes to build out a space, and this free calculator turns the per-foot number into your real budget. Enter the allowance per square foot and the square footage, and you get the total.
TI is one of the most negotiable and most misunderstood parts of a commercial lease. Get it right and the landlord funds most of your build-out. Get it wrong and you are surprised by a big bill at the end. Here is the tool, then how to think about it.
TI allowance, in one line: it is the landlord's contribution to building out your space, quoted per square foot. A $30 per foot allowance on 2,000 square feet is a $60,000 budget.
Watch the overage: if the build-out costs more than the allowance, you cover the difference. Get real bids before you sign so you know what you are on the hook for.
How to Use the TI Allowance Calculator
Multiply the allowance per square foot by your square footage to get the total dollars the landlord will contribute. Enter your estimated build-out cost too, and you can see whether you will have money left over or owe an overage. A $30 per foot allowance on a 2,000 square foot space is $60,000, and if your build-out runs $75,000, you are covering the extra $15,000.
The allowance is a negotiating lever, not a fixed number. Landlords will often increase TI in exchange for a longer term or a higher base rent, so it is really a trade against the rest of your lease terms. Always get contractor bids before you sign so you know whether the allowance actually covers the space you need.
What Is a Typical TI Allowance?
TI allowances vary widely by market, property type, and the condition of the space, from light cosmetic budgets to figures that fund a full build-out. The number also moves with your leverage as a tenant and the length of the lease you are willing to sign. For the full breakdown of typical ranges and how to negotiate them, read my guide to tenant improvement allowances.
Tenant Improvement Allowance FAQ
How do you calculate a tenant improvement allowance?
Multiply the allowance per square foot by the square footage of the space. A $30 per foot allowance on 2,000 square feet gives you a $60,000 build-out budget.
What happens if the build-out costs more than the allowance?
You pay the difference out of pocket. That overage is why you should get real contractor bids before you sign, so you know whether the allowance covers your plans.
Is a tenant improvement allowance negotiable?
Yes, very. Landlords often increase the TI allowance in exchange for a longer lease term or a higher base rent, so treat it as one lever in the overall lease negotiation.
What is a typical TI allowance?
It varies widely by market, property type, and lease length. Rather than a single number, compare the allowance to real build-out bids for your specific space and use.
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Explore CRE CentralFor typical ranges and negotiation tactics, read my guide to tenant improvement allowances, or see all the commercial calculators.