What is Tenant Improvement Allowance (TIA)?
A landlord-funded allowance for tenant build-out of leased space, typically expressed as a dollar amount per rentable square foot.
Definition
A tenant improvement allowance (TIA) is a dollar amount the landlord contributes toward the tenant's build-out of their leased space, typically expressed per rentable square foot. The TIA covers construction costs for partitions, flooring, finishes, and specialized installations required by the tenant. While the TIA itself is a leasing cost and not recoverable through CAM, the ongoing maintenance of improvements funded by the TIA can create CAM billing complexity. If tenant improvements include above-standard HVAC or electrical systems, the incremental maintenance and energy costs may need to be charged directly to that tenant rather than included in the shared CAM pool. Property controllers must track which improvements were funded by the TIA versus tenant-funded to ensure correct expense allocation.
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