Rising Costs, Shifting Market Have Office Landlords Tightening The Purse Strings On TI

After a decade of increases turbocharged by the pandemic, office tenant improvement allowances are flattening as costs rise and landlords grow weary of forking over cash to entice occupiers.

TI allowances for office leases have surged by 112% since 2016, peaking at $212 per SF in gateway markets earlier this year as landlords jockeyed for leases. But a recent leveling of such spending, growing by just 8% last year, underscores the difficulties facing office owners.

“Rents are going up,” CompStak Senior Director of Real Estate Intelligence Alison Baumann said. “But landlords are also spending a lot to get those tenants.”   ...more

RSK: Long article with lots of info. Basically, TI`s are becoming more expensive and unless you have a trophy class A+ office building with high rents to cover those costs, you will have a rough time making ends meet. You will have to give other concessions.