Property Management

What is 'tenant improvement allowance' (TI or TIA) in commercial leasing and how does it work in Hawaii?

AA. A reduction in rent for tenants who make improvements to the space
BB. Money provided by the landlord to a new commercial tenant to build out or improve the leased space to suit the tenant's needs; a key lease negotiation point in Hawaii commercial transactions✓ Correct
CC. A government grant for commercial tenants making accessibility improvements
DD. An allowance provided by the tenant for regular maintenance

Explanation

A Tenant Improvement Allowance (TI or TIA) is a landlord concession providing funds for the tenant to build out or customize the leased space. In Hawaii commercial leasing, the TI amount is a major negotiating point—higher TIs increase landlord costs but attract quality tenants.

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