Subsidize or Face Vacancy

Landlords face a critical decision when considering tenant improvement packages, as these can be financially burdensome yet essential for maintaining occupancy. While subsidizing tenants for a few years may seem excessive, failure to do so risks significant vacancy, which can jeopardize property value. Well-capitalized owners are thus incentivized to provide these subsidies to keep buildings fully occupied. For investors seeking stable returns, exploring new lending portfolios that target properties at lower valuations can yield secure yields, minimizing risk in a challenging market.