What Is a Tenant Improvement Allowance?
A TI allowance is an incentive offered by many commercial real estate owners to cover the costs of customizing space for a tenant's needs.
Posts by Jeff Hamann in the Commercial Real Estate Glossary
Editorial Director, Janover.
Janover's editorial director, Jeff Hamann, has written extensively about all things CRE since 2017. He previously worked as an editor for Commercial Property Executive and Multi-Housing News. Prior to his journalism experience, Jeff worked as a human resource analyst, a musician, a teacher, and a war-time conflict mediator across eight countries. He currently lives with his wife and two children in The Netherlands, where he's failing at learning Dutch while avidly training for his next marathon.
Articles
What Is Cross Collateralization in Commercial Real Estate?
A cross-collateralized loan has benefits and potential drawbacks when it comes to financing your commercial real estate investments. Read our guide to find out…
Stacking Plans in Commercial Real Estate
A stacking plan is a visual representation of a commercial structure that shows the tenants on each floor, the square footage of each floor, when each tenant’s…
Property Management vs. Asset Management in Commercial Real Estate
When it comes to commercial real estate investing, property managers and asset managers may have similar titles, but they have distinctly different roles. A…
Real Estate Debt Funds in Commercial Real Estate
For commercial real estate borrowers, debt funds often offer loans that banks can’t-- or won’t offer, including commercial construction loans, bridge…
Recapture Clause in Commercial Real Estate
In commercial leasing, a recapture clause permits a landlord to terminate a lease early, and may also allow them to demand all or part of the remaining lease…
Submarkets in Commercial Real Estate
In commercial real estate, a submarket is a smaller part of a larger market. While a market may be a city or MSA, such as New York City, or the Dallas-Fort…
UBP: Unpaid Principal Balance in Commercial Real Estate
In commercial real estate finance, unpaid principal balance, or UPB, is the amount of a loan’s principal balance that has not yet been paid back to a lender…
Usable Square Feet vs. Rentable Square Feet in Commercial Real Estate
In commercial real estate, there are two major ways to evaluate a property’s size; usable square feet (USF) and rentable square feet (RSF). In general, this…
Physical vs. Economic Vacancy in Commercial Real Estate
In real estate, the vacancy rate is the amount of units that are unoccupied over a specific time period. It is usually referred to as a percentage. However…
TI/LC: Tenant Improvements / Leasing Commission In Commercial Real Estate
A tenant improvement, or TI, refers to the improvements a commercial property owner makes to the interior of a rental space in order to suit the needs of a new…
Rent Ceiling in Commercial Real Estate
A rent ceiling is the highest price that a landlord can charge for rent. In most cases, rent ceilings apply to multifamily properties and are a result of city…
Special Purpose Entities in Commercial Real Estate
A special purpose entity or single purpose entity (SPE) is a legal entity used to acquire and finance a specific investment while limiting risk for all parties…
Tenancy in Common (TIC) in Commercial Real Estate
Tenancy in common (TIC) is a type of commercial real estate ownership structure in which more than one party owns a specific property. Tenancy in common can…
Value-Add Commercial Properties
Value-add refers to the purchase of a building for the purpose of adding value. Value-add may come from lowering operational expenses and increasing revenue.
What Is Defeasance?
Defeasance is a strategy that permits repayment of a commercial property loan on a property, to facilitate sale or refinance.
Balloon Payments in Commercial Real Estate
Balloon mortgages are two-step financial products that see a borrower make installment-like payments for a certain number of periods before a much larger final…
Understanding Replacement Reserves
Replacement reserves is a budget line item used by commercial property underwriters to address periodic maintenance on systems that wear out faster than the…
Soft Step Down In Commercial Property Loans
A step down requires the payment of a set percentage of the outstanding amount of the loan. That percentage declines as the loan ages. While a typical step…
RUBS Income in Commercial Real Estate
In many older multifamily properties, units are not individually metered for utilities, so owners/landlords use RUBS (Ratio Utility Billing System), a method…
Residual Land Value in Commercial Real Estate
Residual land value is a metric that equals the value of the land, after all costs of developing have been subtracted.
Pari Passu in Commercial Real Estate
In commercial real estate, pari passu simply means that two investors, creditors, or assets are on equal footing - that is, without preference to one or the…
SOFR: Secured Overnight Financing Rate in Commercial Real Estate
Most commercial real estate loan interest rates are currently set by using the LIBOR (London Interbank Offered Rate) as a benchmark. LIBOR is calculated by…
Rent Escalation Clauses in Commercial Real Estate
In most commercial leases, rents are set to increase over time. How often, and by how much they increase is specified in a lease contract’s rent escalation…
Tenant Reimbursements in Commercial Real Estate
Tenant reimbursements, also known as tenant recoveries, are expenses which are paid back to a landlord by a tenant. Common examples of tenant reimbursements…
Securitization in Commercial Real Estate
Securitization is the process in which commercial or residential real estate loans are pooled together, packaged into a financial product, and sold to…
Subletting in Commercial Real Estate
A sublease, or sublet, occurs when a tenant assigns part or all of their lease to a new tenant. In general, most commercial leases permit subletting, but not…
Return on Investment in Commercial Real Estate
In commercial real estate, return on investment (also known as ROI), is a measurement of how much money an investor receives from an investment after all…
Waterfall and Promote Structures in Commercial Real Estate
A waterfall and promote structure, also known as a waterfall model, is a method for distributing the profits from a real estate investment in an uneven way…
Price Per Key in Commercial Real Estate
In hotel construction and acquisition, price per key is a metric that compares the amount of money spent on building or acquiring the hotel with the number of…
Power Centers in Commercial Real Estate
A power center is an outdoor shopping center with multiple big-box retailers, as well as an array of smaller retailers, restaurants, and other kinds of…
Restrictive Covenants in Commercial Real Estate
Restrictive covenants are restrictions placed on the use of a property. In commercial real estate, restrictive covenants may be placed on a property by a…
Prepayment Penalties in Commercial Real Estate
In commercial real estate loans, a prepayment penalty is a fee charged to borrower if they attempt to repay their loan early. When a lender issues a loan, they…
Occupancy Rate in Commercial Real Estate
Occupancy rate is an important metric for temporary housing, and can be measured by dividing the number of occupied units by the number of available units.
NPV: Net Present Value in Commercial Real Estate
Net present value, or NPV, is a financial metric that can help commercial real estate investors determine whether they're getting a certain return-- a 'target…
PSF: Per Square Foot in Commercial Real Estate
PSF, or per square foot, is the way that many commercial real estate rental and sale transactions are calculated. Most commercial leases are set at a specific…
Percentage Leases in Commercial Real Estate
In commercial real estate, a percentage lease is a form of lease that requires a tenant to pay a percentage of their revenues in addition to a base rent, which…
Sale Leaseback in Commercial Real Estate
In commercial real estate, a sale leaseback is a transaction in which one party sells a piece of real estate, and then leases that real estate back from the…
TTM: Trailing Twelve Months in Commercial Real Estate
TTM, or trailing twelve months, is measurement of a project's financial data for the last 12 months. TTM figures do not always represent the last fiscal year…
S&U: Sources and Uses in Commercial Real Estate
A S&U, or sources and uses statement, is a document that shows where the funding for a commercial real estate project is coming from-- and how that capital is…
RR: Rent Rolls in Commercial Real Estate
A rent roll is a list of a property’s current tenants and how much they pay in rent. In practice, a rent roll is perhaps the best way to determine the true…
R&M: Repairs and Maintenance in Commercial Real Estate
R&M, or repairs and maintenance, refers to work done on a commercial property that is designed simply to maintain the property’s current condition. This…
T3: Trailing Three Months in Commercial Real Estate
T3, or trailing three months, is measurement of a commercial real estate project's finances for the last 3 months. T3 can be a great tool for investors, since…
Step-Down Prepayment Penalties on Commercial Property Loans
It is called a step-down penalty because the amount gets smaller the longer the loan is in place. For example, a typical step-down might be 5% of the…
Recourse Debt Versus Non-Recourse Debt in Commercial Real Estate
Recourse debt, also referred to as a recourse loan refers to a debt where the lender is able to claim the borrower’s assets if he or she fails to pay back the…
Preferred Equity Investments in Commercial Real Estate
In a preferred equity investment, the investor is considered an equity partner and therefore benefits from a fixed rate of return.
U.S. Treasury Yields and Commercial Mortgage Rates
Commercial mortgage rates are influenced by the U.S. Treasury yields, where lower treasury yields lead to lower mortgage rates. This results in larger homes at…
Fixed Interest Rates and Variable Interest Rates in Commercial Real Estate
Every loan agreement comes standard with a form of interest that must be paid. Interest rates can be negotiable but usually appear in one of two forms…
AMI: Area Median Income in Commercial Real Estate
AMI stands for Area Median Income and is a statistic published by HUD. It is the household income of the median (middle) household in an area. HUD releases…
HUD in Relation to Commercial Real Estate?
HUD is the term used to describe The United States Housing and Urban DevelopmentDepartment, which is the federal department tasked with creating decent housing…
Defining Yield Maintenance In Commercial Mortgages
Yield maintenance is a prepayment penalty on an existing commercial mortgage. It acts as a guarantee for the commercial property lender who made the original…
Start here
Getting a commercial real estate loan should be easy. Now it is.
One application reaches the lenders that actually fit your deal. Free, confidential, no obligation.
Prefer to talk? (561) 556-7778