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Tenant Improvement Allowance Amortization Calculator

Landlord recovers TI allowance via rent premium amortized over the lease term.

TI allowance

Square feet

Base rent / sqft / yr

Lease term years

Landlord yield on TI %

TI rent premium / sqft / yr

$6.44

Effective rent / sqft

$48.44

Monthly TI addition to rent

$8,045

How the math works

TI amortizes at landlord yield over lease term. Premium = annual TI / sqft.

$500k at 9% / 7yr = $8,042/mo × 12 / 15,000 = $6.43/sqft premium → $48.43 effective rent.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Tenant Improvement Allowance Amortization Calculator is built to give a quick, browser-based estimate for tenant improvement allowance amortization. Landlord recovers TI allowance via rent premium amortized over the lease term. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the tenant improvement allowance amortization result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this tenant improvement allowance amortization estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter TI allowance.
Enter square footage.
Enter base rent per sqft.
Enter lease term years.
Enter landlord yield on TI %.
Read rent premium to amortize TI.

Frequently Asked Questions

How does TI amortization work?

Landlord advances $X TI allowance to tenant (build-out, design, furniture). Landlord amortizes $X over base lease term at target yield (typically 7-10%) as addition to rent. Example: $500k TI over 7 years at 8% = $7,840/month rent addition. Tenant pays back through rent. Amortization makes TI cash-flow-positive for landlord but increases tenant's total occupancy cost.

Typical TI amounts?

Office second-generation: $15-40/sqft. Office first-generation (pre-built): $40-100/sqft. Retail second-generation: $20-60/sqft. Retail first-generation/vanilla box: $30-100/sqft. Medical/lab: $80-200/sqft. Industrial flex: $5-15/sqft. Full warehouse: $2-8/sqft. Lease term: 5-10 years typical. Amount varies with location, tenant credit, market conditions, use.

Rate considerations?

Landlord TI amortization rate: equivalent to lender rate + spread for capital risk. Current market: 8-11% for Class A office, 9-13% Class B office, 7-10% industrial, 8-12% retail. Lower for credit tenants. Higher for startups/unproven businesses. Negotiable in lease — tenant would prefer 5-6%, landlord wants 10-12%. Middle-ground: 7-9% common.

Alternative: amortize or direct cost?

(1) Amortize into rent: easy for tenant cash flow, TI spread over term. (2) Tenant pays direct: tenant controls build-out, deducts as leasehold improvement (IRC 168). Lower effective occupancy cost if tenant has tax appetite. (3) Hybrid: landlord funds building systems (HVAC, structural), tenant funds finishes. Common in medical/dental — tenant funds specific equipment-related buildout, landlord funds shell infrastructure.