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Don’t give your TI allowance back

Don’t give your TI allowance back

4 TI allowance mistakes Miami tenants make

Keith Darby
October 13, 2026

Tenant Representation · Insights

Don't Give Your TI Allowance Back

Scope, draw window and clawback terms can swing a $275,000 allowance by $50,000 to $100,000.

A TI allowance is not free money

The landlord's contribution is priced into the deal. How it is structured, defined and drawn decides whether it works for your business or quietly costs you far more than you realize.

Business owner reviewing a buildout cost estimate

The allowance that's actually a loan

When a landlord offers more than the base allowance, the extra is usually amortized back into your rent, typically at 8 to 10 percent interest. Before you accept additional TI, ask which portion is base, which is financed, and at what rate.

The number that changes everything

A 5,000 SF Brickell office at $55/SF in TI is a $275,000 allowance. The gap between a well-negotiated clause and a poorly negotiated one can swing the real economics by $50,000 to $100,000 over the lease term.

Completed Miami commercial office buildout

Four mistakes that cost tenants

Every one of these gets fixed before you sign, not after.

1. Treating the allowance as the budget
A $50/SF allowance against a $120/SF buildout leaves $70/SF on you. Model the full cost before you sign.

2. Not defining what it covers
Some allowances cover only hard construction costs. Anything not explicitly covered is your cost, so get the scope defined in the LOI.

3. Missing the deadline
Most allowances are use-it-or-lose-it, typically 12 to 18 months from commencement. Miami-Dade permitting alone can add months, so negotiate a longer draw window and start permits the day you sign.

4. Underestimating recapture risk
Leave early and many leases claw back a pro-rated share. On a $275,000 TI over a 5-year lease, leaving after year two can mean repaying $165,000, on top of any termination penalties.

Before you sign, read the fine print

The full article also covers five negotiating moves, plus the restoration clause that can turn a cold storage or lab exit into a six-figure cost.

Read the Full Article

Or talk to us first: Tenant Representation

Keith Alan Darby, CCIM

President and Designated Broker | RISE Realty
M: 305-720-7925
O: 305-859-1606
[email protected] | RISErealty.com

Boutique by Design. Execution by Discipline.
708 Majorca Ave., Coral Gables, FL 33134

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This email is for informational purposes only and does not constitute legal, financial, or real estate transactional advice. TI allowance structures, clawback provisions, and buildout requirements vary by property, landlord, and lease document. Always consult qualified professionals before making lease decisions.

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