Tenant Improvement Allowance Calculator

Tenant Improvement Allowance (TIA) is cash the landlord provides to fit out the tenant's space. Standard $25-$75 per sqft for office; up to $200/sqft for medical/lab. TIA reduces effective rent — typically amortized over lease term.

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TIA Negotiation Norms

Office class-A new construction: $60-$100/sqft. Office class-B second-gen: $25-$45/sqft. Industrial: $5-$15/sqft (minimal build-out). Medical/lab: $100-$200/sqft (specialized infrastructure). Retail: $30-$80/sqft. TIA is paid to tenant upon completion or directly to general contractor.

How TIA Reduces Effective Rent

TIA effectively buys down the rent rate. Example: $45/sqft rent over 7 years = $315 total rent/sqft. $45/sqft TIA = $45 reduction over 7 years = $6.43/sqft/yr reduction. Effective rent = $45 - $6.43 = $38.57/sqft/yr. Always compute effective rent including TIA when comparing leases.

Free Rent Vs TIA

Landlords offer concessions as TIA OR free rent (rent abatement). 12 months free rent on 7-year lease = 14.3% effective rent reduction. TIA targeted to physical improvements. Free rent is cash retained. Most tenants prefer TIA — it forces them to invest in the space they'll use.

Source: CBRE Office Market Report 2025, CompStak Lease Benchmarks 2025. Last updated: May 2026.