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A critical component of a commercial lease negotiation is the Tenant Improvement Allowance (TIA) offered by a landlord to build out new space or retrofit existing space. The TI Allowance is based on several factors: the condition of the premises, length of term, net rental rate, and the financial covenant of the Tenant.
Why is the TIA such a critical part of the lease negotiation? The amount initially offered by landlords is frequently insufficient to complete construction of the most basic build-out, and the Tenant must pay all construction expenses over the TI Allowance. It is essential to have a good understanding of the construction process, costs and a negotiated understanding of what charges are the Landlord’s and what charges the Tenant pays for.
CORE commercial helps our clients structure the lease to ensure they do not have to absorb high unexpected costs before moving into the new space. To find out more about maximizing the Tenant Improvement Allowance: https://www.calgaryofficespace.ca/tenant-information/maximizing-the-tenant-improvement-allowance/
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