Property Management

A commercial tenant's 'build-out' (tenant improvement) allowance in a lease means the landlord:

AWill build the improvements and retain ownership forever
BProvides funds for the tenant to customize the space to their business needs✓ Correct
CRequires the tenant to restore the space after the lease ends
DCharges extra rent to cover improvement costs

Explanation

A tenant improvement (TI) allowance is money provided by the landlord to help the tenant customize the leased space for their specific needs. It is often a key lease negotiating point.

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