224. Negotiating Tenant Improvement Allowances | Brokers Round Table

Key Takeaways:

Tenant improvement allowances can vary significantly based on property type, market conditions, tenant needs and landlord requirements.

Restaurant and medical space TI deals tend to be more complex with higher costs than other property types.

It's important for all parties, especially landlords, to have realistic expectations about TI budgets and costs.

Treating certain capital improvements as capital expenditures rather than TI can make deals more attractive to sophisticated institutional landlords.

Using market data and net effective rent calculations helps determine if a tenant's TI request is reasonable or aligned with market rates.

Understanding motivations is key for brokers to negotiate effectively and find creative solutions in TI negotiations.

Communication, setting clear expectations, and bringing value beyond just order-taking are important skills for brokers handling complex TI deals.