What is TI anyway?
One of the most commonly asked questions of Tenants is, “What does TI stand for?” TI is an acronym for Tenant Improvements, meaning the scope of work required to build out a vacant suite to meet a Tenant’s particular use. Often in office negotiations, a Landlord will provide an allowance for a Tenant to use towards its Tenant Improvements. The amount of such allowance is dependent upon a particular submarket, asking rate, lease length and Tenant’s credit strength.
When negotiating an office lease for our clients, the goal is always to seek what’s referred to a “turnkey” build out. Turnkey simply means that the amount of the allowance meets or exceeds the actual construction costs, thus no up-front out of pocket cost to the Tenant. While this is the goal, it is not always possible depending on the amount of work to be completed and other associated lease terms, but we recommend starting with space planning in order to facilitate getting construction estimates. From here, you can negotiate intelligently on what Tenant Improvement allowance to see from the Landlord.