01TI allowance gap
What the allowance actually covers
Put the landlord's improvement allowance next to the curated fit-out cost for your market. The shortfall is what you fund, and the rent-equivalent line is what that shortfall is really costing you per square foot over the term.
02Your fit-out
Tenant shortfall
$750,000
$75/sf funded by the tenant
Amortised over 10 years at 8%, that shortfall is the equivalent of $11 per square foot per year of additional rent. Compare that against a lower face rent with a smaller allowance before you sign.
| Fit-out cost | $1,350,000 | $135/sf |
| Landlord allowance | $600,000 | $60/sf |
| Tenant funds | $750,000 | $11/sf/yr rent equiv. |
How these figures were produced
- Observed — Recorded directly from the cited source series, unadjusted.
- Modelled — Derived arithmetically from observed inputs using the published method; not a market quote.
Carry this deal forward
Your numbers travel with the link
The deal is encoded in the URL, never stored. Open a sister utility and it arrives pre-filled.
- LeaselorLeasing & incomeTurn rent, TMI and vacancy into the NOI you underwrote.Soon
- CapitalorPre-acquisition & financingDebt-service the deal and find the loan the numbers support.
- StratalorLong-term operations & facility managementBenchmark opex and TMI to hold the NOI you underwrote.
Keep this deal under watch
Save the deal and Dealor re-runs it every month against current rates and your own dates — so you hear about a broken DSCR or a lapsing renewal before your lender does.
03Related
Price the whole fit-out first
04Questions
What is a tenant improvement allowance?
It is a landlord contribution to the cost of fitting out leased premises, usually quoted in dollars per rentable square foot and paid on completion against invoices. It is a leasing inducement, so it is priced into the rent whether or not the tenant uses all of it.
Why convert the shortfall into rent?
A tenant funding a shortfall out of pocket is effectively paying additional rent. Spreading the gap over the term at a discount rate gives the rent-equivalent figure to compare against a landlord who offers a smaller allowance at lower face rent.
Does the allowance cover everything?
Rarely. Most work letters exclude furniture, audio-visual, data cabling, security, signage and the tenant's own consultants. Read the work letter's exclusions before treating the allowance as the budget.
05Sources
Sources
- [1] Altus Group Canadian Cost Guide 2025, Toronto base range — Published fit-out cost ranges behind the curated rate.
Not advice — Buildlor is a data publisher. We do not bid, price, estimate, or build work, and nothing here is a quote, a tender price, or construction advice. Figures are indicative order-of-magnitude benchmarks for early budgeting and must be confirmed by a qualified cost consultant, quantity surveyor, or general contractor before you rely on them. About Buildlor