Typically for a new or soon-to-be-constructed property, this has to do with the tenant’s build-out specifications. Tenants have a blank canvas, so they can customize the interior finishes to their desired outcome. This arrangement limits the landlord’s expenditure with a fixed dollar amount over the previously negotiated price. Arrangements like these are more efficient when both parties come to an agreement on a detailed definition of what construction is incorporated and at what price.
Allowance Over Building Shell
Typically for a new or soon-to-be-constructed property, this has to do with the tenant’s build-out specifications. Tenants have a blank canvas, so they can customize the interior finishes to their desired outcome. This arrangement limits the landlord’s expenditure with a fixed dollar amount over the previously negotiated price. Arrangements like these are more efficient when both parties come to an agreement on a detailed definition of what construction is incorporated and at what price.
