Commercial property owners continue to thrive because of great tenants. Not all spaces are set up exactly to fit a specific tenant’s needs. Tenant improvement projects are common among commercial spaces, as a result.


What’s a tenant improvement project?

A tenant improvement project is typically a build out of a commercial leased space to suit the needs of the tenant. For example, let’s consider that there is a commercial strip space with 5 units available. A tenant is interested in combining two spaces into one and finishing it out for their retail store. This project would be a tenant improvement.


According to, “a commercial real estate lease can establish the scope of tenant improvements that can be made on the property, what kinds of improvements, how the costs can be managed throughout construction, and the total eligible tenant improvement allowance available for the tenant to use.” (


What is a tenant improvement allowance?

Generally, a tenant improvement allowance is already negotiated as part of the lease agreement. While the amount is negotiable, it may not change considerably and any remaining investment would be the responsibility of the tenant. As a tenant, it’s important to research and plan in advance for the improvements to be completed in order to avoid running out of allowance money and paying out of pocket as well.


The tenant improvement allowance may be enough to cover big-ticket items like plumbing, electrical or HVAC. Research up front will save you time and headache so that you know what the improvement allowance will cover. Many landlords will only cover the costs that improve value to the space overall, but things like fees and permits can be part of the negotiation. Additionally, tenants should not expect to have things like furniture, décor and interior design covered in the tenant improvement allowance as this is not an appreciable asset.


Who is in charge of the construction process?

It’s important to determine in the negotiation process who will be in charge of the tenant improvement process. If the tenant is contributing more financially than the allowance provides for, the tenant should negotiate for greater control over the process. If the tenant is not providing as much capital, the landlord may control the construction process, but keeping the tenant satisfied throughout is helpful and beneficial.


Most landlords recognize that tenant improvement projects will be necessary to engage long-term tenants. Tenant improvement projects can be a great way to attract the best tenants and also raise property value through capital improvements. Tenant improvement negotiations and projects can be negotiated with the assistance of experts in commercial real estate, like Weaver Realty. We work with investors to execute improvement projects and grow their business. It would be our pleasure to work with you. Call us today at 904-733-0039 to consult with our team of project management experts.