In today’s market, landlords are covering an increasing portion of the tenant improvement cost, often 100%. Factors that affect a landlord’s willingness to cover these costs include:
• Tenant’s financial strength
• Total cost to complete the tenant improvements
• Layout of the space (unique or re-leasable?)
• Lease duration
What about the other moving costs? Items such as cabling, changing stationary and moving or buying furniture are typically born by the tenant. A new trend creeping into the tenant-friendly market is the willingness of landlords to contribute to these expenses. The landlord’s contribution can take several forms, including:
• A “moving allowance”, to reimburse the tenant’s actual moving expenses.
• The ability to apply unused tenant improvement funds to moving expenses.
• Additional free rent
Your tenant broker can provide a strategy to capitalize on current market conditions. Removing the moving costs from the equation allows a tenant to consider all of the opportunities the market has to offer.