A Tenant Improvement (TI) allowance is a specific dollar amount provided by a landlord to a tenant to help fund the physical construction, build-out, or renovation of a leased commercial space. TI allowances are usually calculated on a per-square-foot basis and are negotiated heavily during the Letter of Intent (LOI) phase. A skilled tenant representative leverages market vacancies, landlord competition, and the tenant’s creditworthiness to maximize this allowance, reducing the tenant’s initial upfront capital expenditure.