CrunchLease

Tenant Improvement Allowance & Amortization Calculator

Check whether a TI allowance covers your buildout — and what amortizing the gap adds to your rent.

Rentable area being built out. Shared with the amortization tab.
SF
Dollars per SF the landlord contributes toward improvements.
$/SF
Your contractor's estimated cost to build the space, per SF.
$/SF

Allowance vs cost

Total allowance
$90,000
Total buildout cost
$135,000
Gap to finance
$45,000
Gap per SF
$15.00

Your $30.00/SF allowance sits within the typical $10–$30/SF range for second-generation office.

Benchmarks reviewed 2026-07-08.

TI allowance vs buildout cost (don’t confuse them)

A tenant improvement (TI) allowance is money the landlord contributes toward building out your space, quoted in dollars per square foot. Keep it separate from buildout cost — what the construction actually costs. The two are rarely the same number: a restaurant buildout can run $200–$500/SF while the landlord’s allowance for it is more like $40–$100/SF. The gap is what the tenant funds out of pocket or the landlord amortizes back into rent — which is exactly what this calculator models.

TI is also not free money. Landlords recoup it through higher rent, a longer term, or both, so a bigger allowance almost always rides on a longer commitment and stronger tenant credit. And unused allowance rarely comes back to you as cash.

Typical TI allowances by space type

These are landlord allowances, not buildout costs, and scale with how much work the space needs and how badly the landlord wants the tenant (Appendix A.3):

Space typeTI allowance ($/SF)Notes
Second-generation office15–40
Class A / new office (white box)60–100+High-vacancy markets like SF reach 120–135
First-gen ground-up office30–60
Medical office60–130Specialized MEP drives the top of the range
Retail (local / vanilla shell)20–50
Retail (national credit tenant)80–150
Restaurant40–100When the landlord wants the food anchor
Industrial / flex5–20

The calculator flags where your offer sits against the band for the space type you pick.

When landlords amortize TI — and what it really costs

If the buildout exceeds the allowance, landlords often finance the gap and add it back to your rent with interest — typically 6–10%/yr over the lease term. That’s exactly a loan. The Amortization tab turns the gap into a monthly payment and a rent impact in $/SF/yr, the unit you’ll actually negotiate in.

Worked example

A 3,000 SF space with a $30/SF allowance ($90,000) against a $45/SF buildout ($135,000) leaves a $45,000 gap. Amortized at 8% over 60 months, that’s $912.44/month — a $3.65/SF/yr rent add — repaying $54,746 total, of which $9,746 is interest.

Negotiation levers that move TI

Longer lease terms, a stronger covenant, or trading free rent for TI can all shift the allowance. If you’re weighing amortized TI against a rent-free period, compare the two in the Net Effective Rent Calculator; to see how the gap rides on top of base rent and pass-throughs, use the NNN Lease Calculator. Investors underwriting the deal can turn occupancy cost into value with the Cap Rate Calculator.

Frequently asked questions

What is a typical tenant improvement allowance?

It depends heavily on the space — and remember this is the landlord's allowance, not buildout cost. Second-generation office often runs $15–$40/SF, first-gen or ground-up office $30–$60/SF, and Class A white-box space $60–$100+/SF (higher in high-vacancy markets). Medical office reaches $60–$130/SF for specialized systems; retail is $20–$50/SF local or $80–$150/SF for national credit tenants; restaurants $40–$100/SF. Industrial/flex is lowest at $5–$20/SF.

Is a TI allowance free money?

Not really. The landlord prices the allowance into your rent and lease economics — a bigger allowance usually means a higher face rate or longer term. And if your buildout exceeds the allowance, you pay the difference, often by amortizing it back into rent with interest. It's a negotiated concession, not a gift.

What does amortized TI mean?

When your buildout costs more than the allowance, the landlord may fund the shortfall and add it back to your rent over the lease term, with interest — economically identical to a loan. Amortized TI shows up as a per-SF rent add-on. This calculator converts the gap into a monthly payment and a $/SF/yr rent impact.

What interest rate do landlords use to amortize TI?

Commonly 6–10%/yr, though it's negotiable and tied to the landlord's cost of capital and your credit. A higher rate meaningfully raises the rent add-on, so it's worth pushing on. Watch the amortization term too: it should generally match the lease term, not exceed it.

Does TI allowance cover furniture?

Usually not. TI allowances are meant for permanent improvements — walls, flooring, lighting, HVAC, built-ins — that stay with the space. Furniture, fixtures, and equipment (FF&E), cabling, and moving costs are typically excluded, though some deals fold a capped amount of "soft costs" in. Check the lease work letter for what qualifies.

Related calculators

Net Effective Rent Calculator Turn face rent, free rent, and TI concessions into a single effective rent figure. Triple Net (NNN) Lease Calculator Add base rent, taxes, insurance, and CAM to see the true all-in cost of an NNN lease. Cap Rate Calculator Solve cap rate, value, or required NOI, and stress-test value with a sensitivity matrix.