Commercial NNN Lease Calculator
Calculate total monthly occupancy cost under a triple net (NNN) lease. Add base rent plus property tax, insurance, and CAM for the true cost.
Tenant Improvement Allowance Calculator
Calculate your net build-out cost after applying the landlord's TI allowance. See how much you need to invest above the allowance for your space.
Rentable area
sq ft
months
Landlord contribution
$/sqft
Actual cost estimate
$/sqft
Soft costs, design, permitting, etc.
$
47%
$140,000.00 covered$160,000.00 tenant pays
TI Allowance Total⧉
$140,000.00
35$/sqft × 4,000 sqft
Total Build-Out Cost⧉
$300,000.00
75$/sqft × 4,000 sqft
Tenant Out-of-Pocket (Build-Out)⧉
$160,000.00
Build-out cost exceeding TI allowance
Landlord Additional Cost⧉
$2,000.00
Soft costs, design, permitting
Total Tenant OOP (both categories)⧉
$162,000.00
Hard + soft cost responsibility
Amortized Monthly Cost⧉
$2,700.00
Over 60 months
Amortized Annual Cost⧉
$32,400.00
If prorated per year
TI Coverage %⧉
46.7%
% of hard costs covered by landlord
| Month | Monthly Payment | Cumulative Paid | Remaining |
|---|---|---|---|
| Month 1 | $2,700.00 | $2,700.00 | $159,300.00 |
| Month 2 | $2,700.00 | $5,400.00 | $156,600.00 |
| Month 3 | $2,700.00 | $8,100.00 | $153,900.00 |
| Month 4 | $2,700.00 | $10,800.00 | $151,200.00 |
| Month 5 | $2,700.00 | $13,500.00 | $148,500.00 |
| Month 6 | $2,700.00 | $16,200.00 | $145,800.00 |
| Month 7 | $2,700.00 | $18,900.00 | $143,100.00 |
| Month 8 | $2,700.00 | $21,600.00 | $140,400.00 |
| Month 9 | $2,700.00 | $24,300.00 | $137,700.00 |
| Month 10 | $2,700.00 | $27,000.00 | $135,000.00 |
| Month 11 | $2,700.00 | $29,700.00 | $132,300.00 |
| Month 12 | $2,700.00 | $32,400.00 | $129,600.00 |
Planning notes, formulas, and examples
About the Tenant Improvement Allowance Calculator
When negotiating a commercial lease, the landlord typically offers a Tenant Improvement (TI) allowance — a dollar amount per square foot to help cover the cost of building out your space. TI allowances typically range from $15–$80/sq ft for office space and $10–$40/sq ft for retail, depending on the market, lease term, and space condition.
The TI allowance rarely covers the full build-out cost. Your actual construction expenses may run $50–$150/sq ft for office build-outs, meaning you'll need to invest the difference out of pocket. This "net build-out cost" is a critical factor in your total occupancy cost analysis.
This calculator shows your total build-out budget, how much the TI allowance covers, and what you'll need to fund yourself. It also amortizes your out-of-pocket investment over the lease term for cash flow planning.
Homebuyers, investors, and real-estate professionals all benefit from precise tenant improvement allowance figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.
When This Page Helps
TI allowances are one of the most negotiated elements in commercial leases. This calculator quantifies the gap between the allowance and your build-out needs so you can negotiate effectively.
How to Use the Inputs
- Enter your unit's square footage.
- Enter the TI allowance per sq ft offered by the landlord.
- Enter the estimated total build-out cost per sq ft.
- Enter the lease term in months.
- View the TI allowance total, build-out cost, and net out-of-pocket.
- Review the amortized monthly cost of your investment.
Formula used
TI Allowance Total = TI $/sq ft × Square Footage
Total Build-Out = Build-Out $/sq ft × Square Footage
Net Out-of-Pocket = Total Build-Out − TI Allowance
Amortized Monthly = Net Out-of-Pocket / Lease MonthsExample Calculation
Result: $160,000 net out-of-pocket ($2,667/mo amortized)
TI allowance: $35/sq ft × 4,000 = $140,000. Total build-out: $75/sq ft × 4,000 = $300,000. Net out-of-pocket: $160,000. Amortized over a 60-month lease, that's $2,667/month on top of rent — a significant occupancy cost component.
Tips & Best Practices
- TI allowances increase with lease length — a 10-year lease may get $50–80/sq ft vs. $20–40 for a 5-year.
- In a soft market, landlords may offer above-market TI to attract tenants. Use your leverage.
- Get multiple contractor bids for your build-out to negotiate confidently with the landlord.
- TI above your actual needs can sometimes be applied to rent reduction (ask the landlord).
- If the space is "vanilla box" (some basics already done), your build-out costs will be lower.
- Ask about "as-is" discounts: taking the space with minimal improvements in exchange for other concessions.
TI Negotiation Strategies
TI is one of the most flexible negotiation points in commercial leasing. In tenant-favorable markets, push for $10–20 more per square foot above the initial offer. In competitive markets, focus on other concessions (free rent, CAM caps) if TI is firm.
Build-Out Cost Drivers
The biggest cost variables are: demolition of existing improvements, HVAC and electrical work, plumbing (especially for kitchens/restrooms), specialty finishes (glass walls, raised floors), and permitting/code compliance. Get detailed contractor bids before committing to a space.
The True Cost of Your Space
Your monthly occupancy cost is: base rent + NNN charges + amortized build-out + insurance + furniture amortization. A $25/sq ft NNN space with a $160,000 build-out investment (amortized at $2,667/mo) on 4,000 sq ft effectively costs $33/sq ft. Always calculate the all-in number.
Sources & Methodology
Last updated:
Frequently Asked Questions
For office space: $25–$60/sq ft for 5-year leases, $40–$80+ for 10+ year leases. Retail: $10–$40/sq ft. Industrial: $5–$15/sq ft. Class A buildings in major markets offer the highest allowances. Second-generation space (previously built out) may have lower TI.
It depends on the lease. In "landlord-managed" TI, the landlord hires contractors and manages construction. In "tenant-managed" TI, the tenant controls the process and the landlord reimburses up to the allowance. Tenant-managed gives you more control and often lower costs.
Rarely. Most landlords require TI to be used for permanent improvements to the space. However, some will allow unused TI to be applied to rent, moving costs, or furniture. This is a negotiation point.
Basic office build-out: $50–$80/sq ft. Higher-end finishes: $80–$120/sq ft. Premium/executive spaces: $120–$200+/sq ft. Retail varies enormously by type: basic retail $40–70, restaurants $100–$250+. Get contractor bids for accurate estimates.
Indirectly, yes. Landlords price TI into the lease economics. Higher TI may mean higher base rent or fewer other concessions. The landlord is essentially lending you the TI and recouping it through higher rent over the lease term.
Most leases require that improvements stay with the space (they become the landlord's property). Some leases require you to remove improvements and restore the space to its original condition, which can be expensive. Negotiate this term carefully.
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