2 Types of Tenant Improvement Allowances for an Office Rental Space in Overland Park
If you know you want to make improvements to a space, the key is to address this as early as possible in negotiations. The tenant improvement allowance your landlord gives you as well as the length of your lease have an impact on the rental rate you will settle on. The two most important things you as a tenant should try to do during these negotiations is to get as much of an allowance as you can from the landlord and to also try to maintain control of the building process as much as possible. Here are two different types of tenant improvement allowances, as described in the article “Negotiating the Tenant Improvement Allowance”:
#1 Turn Key Build-out
In a turn key build-out structure, the landlord is responsible for all of the build-out expenses, which are factored into the rental rate and the plan for the office space that takes into account construction.
#2 Stated Dollar Amount
In a stated dollar amount structure, the landlord provides the tenants with the lump sum to put towards the build-out. Often this also covers any architectural and engineering expenses.
While many tenants prefer the turn key approach, there are pros and cons to both. The main goal that tenants strive for is to reduce out-of-pocket costs and to get the most out of their improvement allowance.