Why Tenant Improvement? | Vestian

Tenant Improvement

Tenant improvement allowance is an important factor in lease negotiations. It is a type of agreement that states that the landlord will compensate the tenant for all or a portion of funds required to fit-out in the leased commercial space.

When entering into a new lease agreement, both tenants and landlords need to be clear as to who will be paying for the tenant improvements. In most cases, the landlord will offer a certain amount of money which is known as a tenant improvement allowance to make improvements. In agreements like this, there should be absolute clarity in communication to avoid inconvenience to both the landlord and the tenant.

Securing TI allowance can be very beneficial to a tenant. However, it is also necessary for one to have a clear understanding on what kind of improvements have been agreed upon. For example, take into consideration the existing mechanical, electrical and plumbing equipment for any outdated equipment or deferred maintenance issues. Due to large variation in each tenant’s needs, it is best to enlist the assistance of a qualified project manager, who has a clear understanding of your specific requirements and project details.

Benefits of Tenant Improvement

Tenant Improvements can require a good deal of negotiation between the owners and tenants in terms of both cost and payment. Here, both benefit from the resulting situation; landlords have a building with new additions, better interiors and a guarantee of a longer tenancy while tenants get the workspace they require. All these elements can contribute to the success of a business, making it easier for property owners to retain and attract tenants.

BAS as part of TI function

Building Automation System (BAS) is now a prerequisite for any sustainable, flexible and responsive office space. Apart from the obvious lower energy costs and better rental rates, landlords benefit from higher net operating income (NOI), and in turn higher ROI. As BAS provides accurate data regarding a building’s energy efficiency, smart property services and safety parameters, potential tenants get the added advantage of basing their decisions on sound data. This makes it easier for tenants to choose a project over the other.


Today tenants have become extremely aware and are cautious about making long-term leasing commitments. We also see that there is a rise in tenant expectations wherein the tenants exactly know what they want and they are willing to pay for it. Competitive edge lies with the landlord who is abreast of the changing needs of the client and caters to it.


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