FOR IMMEDIATE RELEASE
Edmonton, Alberta, CA, 16 November 2021– If you’re looking at renting a commercial space, it’s likely you’ll have to renovate the space to accommodate your business. Whether it’s an office, retail space, or restaurant, you’ll need the cashflow upfront to start the renovation, and your landlord should provide funds through a tenant improvement allowance.
What is tenant improvement allowance and what does it cover?
Tenant improvement allowance, or TI allowance, is a pre-negotiated amount of money that the landlord gives to the tenant to cover renovation and construction expenses.
Tenants and landlords will determine what work is necessary to suit the tenant’s business. During negotiations, they’ll also decide whether the approved sum of money will cover all or just a portion of the work.
“When you negotiate a TI allowance it might tie into negotiating a base rental rate,” said David Pourde of Invicta Construction. “The landlord will probably offer a rental rate based on the newly renovated space, so that’s important to consider for the long-term when negotiating the TI allowance.”
Negotiations will also decide if the landlord is paying the allowance directly to Edmonton commercial contractors for their work or reimburse the tenant when the job is done.
How much is a typical TI allowance?
A TI allowance is usually calculated by square footage. For example, the landlord can approve a $20/sq. ft. allowance for renovations in a 2,500 sq. ft. space. That means the TI allowance would be $50,000.
“It’s important that you get an estimate and understand the scope of work involved before settling on a TI allowance. You don’t want to agree on a figure only to find out it isn’t going to cover the renovation costs of making the space work for your business,” said Pourde.
Working with a commercial contractor can help
Whether you’re a tenant or a landlord, working with third-party professional Edmonton commercial contractors on tenant improvements is essential. They can assess the scope of the project, estimate costs, and assist with the TI allowance negotiations.
An experienced commercial contractor can also suggest improvements that add the most function and value to the space. This advice can ensure the tenant is getting the most out of their space to succeed as a business, and that the landlord’s building is receiving quality, value-adding upgrades.
A contractor will help organize priorities, budgets, timelines, and make it easier to put together a plan for the TI allowance negotiation.
About Invicta Construction: Invicta Construction is a RenovationFind certified commercial renovation company located in Edmonton, Alberta, and they also serve the surrounding areas. Their mission is to exceed customer expectations by providing high-quality work, personalized customer service, and transparent project management that takes the stress out of a significant commercial building project.