Property Management

A Mississippi commercial property manager is negotiating a new lease for office space. The tenant requests a 'tenant improvement allowance' (TI allowance). This allowance:

AIs money the tenant pays to the landlord for building modifications
BIs money the landlord provides to the tenant to fund build-out of the leased space to the tenant's specifications✓ Correct
CIs a reduction in the security deposit
DIs a government subsidy for commercial tenants

Explanation

A tenant improvement (TI) allowance is a sum provided by the landlord to help the tenant fit out the space for their specific use. The landlord typically amortizes the TI cost into the rent.

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