A tenant improvement allowance is one of the most negotiated numbers in a commercial lease, and one of the most misunderstood. Here is what it typically pays for and where tenants get surprised.
What the allowance usually covers
Most allowances are meant for permanent improvements to the space: demolition, framing, drywall, ceilings, flooring, standard lighting and power, HVAC distribution, doors, and paint. Storefront and interior glazing tied to the base building scope often qualifies as well.
What often falls outside it
Furniture, data cabling, security systems, signage, specialty equipment, and design fees are frequently excluded or capped. So are upgrades above building standard, such as premium glass, switchable partitions, or custom millwork.
How to protect the number
Get a real scope and a fixed-price bid before you sign, not a rough per-square-foot guess. A contractor who has priced the actual drawings can tell you whether the allowance covers the work or leaves a gap you will fund out of pocket.
Working through a lease now? Send us the space plan and we will price it against your allowance.



