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Finding the right commercial space is only part of the equation. The next question is what it will cost to make that space work for your business. A tenant improvement allowance can help, but the details matter as much as the dollars. What is a tenant improvement allowance A tenant improvement allowance, often called a TI allowance or TIA, is the amount a landlord agrees to contribute toward approved improvements to lease a space. It is negotiated as a fixed amount or an amou

Understanding the space you occupy—and the space you pay for. When comparing commercial spaces, you may see square footage described as gross, usable, or rentable. These measurements serve different purposes, and understanding the distinction helps you compare properties and calculate occupancy costs. We will frequently reference BOMA—the Building Owners and Managers Association International. BOMA publishes widely used measurement standards for commercial real estate. Differ

A capitalization rate, or cap rate, expresses a property’s annual net operating income as a percentage of its purchase price or market value. Cap Rate = Net Operating Income ÷ Purchase Price Net operating income, or NOI, is the income remaining after property operating expenses, before mortgage payments, income taxes, depreciation, or leasing commissions. Cap rate helps investors compare income-producing properties, but it does not represent their total investment return. So,

A triple net—or NNN—lease generally requires the tenant to pay three categories of property expenses in addition to base rent: real estate taxes, building insurance, and maintenance. Those are the three “nets.” Essentially, the tenant pays the ongoing operating costs associated with the property they rent, or their share of those costs in a multi-tenant building. But that doesn’t automatically mean the tenant pays for everything. Responsibility for major repairs, replacements