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Tenant Improvement Draw Calculator
Tenant improvement work is paid in draws against completed construction. Retainage is withheld to protect the owner from incomplete work. This calculator sizes each draw net of retainage, splits between lender advance and owner equity, and estimates interest carry during the buildout.
Per-draw amount (net of retainage)
$101,250
Per-draw amount (gross)
$112,500
Total retainage held
$45,000
Lender-funded portion
$360,000
Owner-funded portion
$90,000
Estimated interest carry
$4,809
How the math works
TI draws are requested against completed work, typically monthly or at defined milestones (demolition, rough-in, drywall, finish). The lender funds their advance rate; the owner equity-funds the rest. Retainage (usually 10%) is held back until completion and punch list sign-off.
Interest carry estimates the cost of capital on the average draw balance outstanding for the average months before reimbursement — real projects have staggered reimbursement and higher carry.
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 Draw Calculator is built to give a quick, browser-based estimate for tenant improvement draw. Tenant improvement work is paid in draws against completed construction. Retainage is withheld to protect the owner from incomplete work. This calculator sizes each draw net of retainage, splits between lender advance and owner equity, and estimates interest carry during the buildout. 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 draw 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 draw 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 total TI budget and retainage percentage (usually 10%).
- Enter number of draws — typically 3-6 for office buildouts.
- Enter the lender advance rate — most TI loans are 75-85%.
- Enter construction loan rate and average months a draw is outstanding.
- Read per-draw amount, retainage held, and interest carry.
Frequently Asked Questions
When is retainage released?
At substantial completion + lien waivers + punch list sign-off. 50% release at substantial completion is common; balance after punch is complete. In some states retainage drops to 5% after 50% completion.
Who funds the owner portion?
Usually out of cash equity held in an operating account; some lenders require the equity to be 'in first' before releasing any TI advance. Preferred-equity and mezz can fund the owner portion on larger deals.
Does free rent reduce TI draw needs?
No — free rent is a revenue concession, not a construction funding source. Draws fund physical work regardless of rent concessions.
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