TL;DR
- TI of $130-$200/sqft is current US Class A market on a 10-year deal.
- Trophy lease-up can push to $250+ in this cycle.
- Over-allowance spend is amortised into rent — model the implicit interest rate.
- TI must be controlled by tenant or contractor on tenant's behalf to protect spend.
- Always include unused TI as a tenant credit in the LOI.
Sizing the ask
Start with a real fit-out">fit-out budget — not the brokered rule of thumb. A high-spec Class A office with workplace strategy, premium millwork, advanced AV, and acoustically tuned meeting rooms costs $200-$340 per square foot in major US markets. The TI ask should cover 60-80% of that. In this cycle, $130-$200 per sqft is achievable on a 10-year Class A deal. Trophy lease-ups in soft markets (San Francisco, Chicago, parts of Los Angeles) push past $200.
Over-allowance amortisation
If you spend more than the TI allowance, the excess is typically amortised into rent over the term at a stated interest rate. The interest rate is negotiable — landlords ask for 8-10%; the right answer is closer to a market commercial rate (5-7% in 2026). Always negotiate this rate explicitly in the LOI.
Controlling the spend
The TI dollar moves in two ways: (1) the landlord builds, then bills against the allowance, or (2) the tenant builds, then is reimbursed against the allowance. Tenant-controlled is materially better. The landlord-controlled approach often produces aggressive markups, slower delivery, and disputes over completion. Insist on a tenant-engaged general contractor with the landlord retaining only base-building approval rights.
Unused TI
Unused TI should be repayable to the tenant as a free-rent credit at term commencement. Landlords often try to retain unused allowance — this is a negotiable point and should be flagged in the LOI.