If you have moved into a new office space recently or you are looking at a new property to move into in the near future, you probably have a vision for what you want the property to look like and maybe you have some renovations you would like to make. Property owners want to make sure their properties are profitable and to do that they need tenants. Similar to the way that a car dealership might let you get into a vehicle with no money down or a cell phone company might pay the cancellation costs for you to incentivize you to switch carriers, a landlord can offer potential tenants incentives to make their property more appealing. One of the highly sought after incentives that a landlord can offer is a tenant improvement allowance. These allowances are the amount in dollars that a landlord is willing to spend so a tenant can make renovations, usually measured in per-square-foot or total dollar sums. If you are planning on getting into a new space, you should definitely be talking to your tenant representative about negotiating a tenant improvement allowance.
Negotiating A Fair Tenant Improvement Allowance
If you plan on making renovations to a property, make sure you have an established renovations plan and an accurate estimation of the costs of your renovations. When your tenant representative has this information, they can negotiate for a fair tenant improvement allowance that will be acceptable to both you and your landlord.
How much your landlord will be willing to contribute versus how much you will have to manage out of pocket will depend on the value that a landlord gets from having you as a tenant, how much the improvement increases the property value and how tight the market is. These are all factors that your tenant representative can go over with you.
Getting The Actual Work Done
Another important part of the negotiation is to determine who will be responsible for hiring a contractor to complete the work or how the work will be done. Often times, because the landlord owns and knows the property and the other tenants, they will want to hire a trusted contractor to complete the work. However, some landlords that offer big tenant improvement allowance dollars up front want to save costs when it’s time for the work to get done, so they will hire a cheaper contractor, which could result in a poor or even dangerous renovation for you. You will want your tenant representative to help you negotiate this crucial step as well.
Finding A Good Tenant Representative
When it comes to negotiating a fair tenant improvement allowance, as well as the entirety of the lease, you want to make sure you have a good team on your side. You need a partner like the tenant representation team at LCI Realty. Get in touch with our tenant representative team now to find your next commercial property. Contact 480-531-8919 today.