Finance category

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Tenant Improvement Rent Bump Calculator

When a tenant wants extra TI beyond what the landlord will fund outright, the common solution is an amortized rent bump — treated like a loan priced at the landlord's required return. This calculator sizes that bump per SF per year so both sides agree on the economics upfront.

Additional TI funded by landlord / SF

Leased SF

Lease term (years)

Recovery rate

Rent bump / SF / year to recover TI

$2.90

Annual rent bump

$28,960

Monthly TI amortization

$2,413

Total paid back over term

$202,722

Interest / return component

$52,722

Total TI funded

$150,000

How the math works

When a landlord funds TI above the standard allowance, the cost is typically recovered by adding a rent bump — TI amortization + return — that carries through the lease term. This calculator sizes the rent bump per SF per year for a requested recovery rate.

Recovery rate should be above the landlord's cost of capital — typically prime + 3-4% or the construction loan rate. Keeping it at a blended cost keeps the arrangement fair to both sides.

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 Rent Bump Calculator is built to give a quick, browser-based estimate for tenant improvement rent bump. When a tenant wants extra TI beyond what the landlord will fund outright, the common solution is an amortized rent bump — treated like a loan priced at the landlord's required return. This calculator sizes that bump per SF per year so both sides agree on the economics upfront. 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 rent bump 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 rent bump 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 additional TI funded by landlord per SF.
Enter leased SF and lease term.
Enter the recovery rate (landlord's return on capital).
Read the rent bump per SF per year.

Frequently Asked Questions

When is this used?

Tenant needs $80/SF buildout but landlord will only fund $45/SF standard. The extra $35/SF gets amortized into rent — tenant effectively borrows from landlord at the recovery rate.

Typical recovery rates?

Institutional landlords: 8-10%. Development-focused owners: 10-12%. It should exceed the landlord's cost of capital — below that, the landlord is subsidizing the deal.

Can the tenant pre-pay?

Usually not — the rent bump is embedded in base rent and runs the full term. If the tenant exits early, remaining amortization is typically recovered as a termination fee.