As a tenant, is it EVER possible to get half of your TI allowance upfront?
Hi all,  

I'm in the process of negotiating a lease right now. My financials are in great shape and the landlord is providing a modest allowance to be used toward improving the space (with permanent fixtures that benefit him even after me should I eventually move out). Is there any possibility that half could be provided upfront and the rest reimbursed?  

Needlessly to say that'd be helpful to me as it gives me a bigger pool to work with at the start. My agent seems insistent that this is impossible while acknowledgeable that it *is* a negotiable term, however it is not one we should focus on. I'm of the mindset that it doesn't hurt to ask.
[{"id": "e7vfmbx", "text": "Most landlords would rather give out free rent. But it\u2019s hard to say without going deeper into the terms of the deal itself.", "replies": [{"id": "e7wbbn0", "text": "THIS IS THE ANSWER!!!  As a landlord and broker, this is the ONLY feasible answer in the realm of possibility.  ", "replies": [], "depth": 2}, {"id": "e7ydody", "text": "Ok, thanks. The landlord seems pretty cool to be honest. I requested 7 months build-out time and 3 months free rent as well as a TI allowance. He countered with 5 months build-out time and 2 months free rent during which period I pay NNN fees. He offered 2/3rd of the TI I requested.  \n\nPretty much all architects I've spoken to projected 7-8 months for complete build-out time. Perhaps I will focus less on TI and more on free rent. To be fair, in return I will be vitalizing my section of the building quite a bit with top notch architects and designers as well as bringing a proven concept that will attract lots of traffic to an otherwise lackluster plaza (presumably thereby raising the value as well?).", "replies": [], "depth": 2}], "depth": 1}, {"id": "e7vgv6m", "text": "It\u2019s a longshot and I\u2019ve never heard of this happening. The landlord sees the TI allowance as an investment in the property and wants to make sure the work is done before handing over the cash. ", "replies": [], "depth": 1}, {"id": "e7vi5gd", "text": "Could also involve lender constraints on the Landlord...", "replies": [{"id": "e7vmsql", "text": "Definitely. As a former construction lender, we would generally not fund tenant improvement dollars without at least invoices and usually inspections for work progress to date. Even then, we'd fund with a holdback of 10% until the project is complete.\n\nThat said, the owner/landlord can decide to do whatever they want with their money, including giving you TI dollars without any work completed.", "replies": [], "depth": 2}], "depth": 1}, {"id": "e7vp6du", "text": "I'd be careful about asking, it may imply that you don't have the operating capital to open. This isn't always a big deal, but could be the reason why you lose the space to another tenant. Just wanted to give you the warning with regards to, \"it doesn't hurt to ask.\"", "replies": [{"id": "e7vqc3l", "text": "This. We\u2019ve had tenants ask for this up front and it sounded the alarm that they didn\u2019t have enough cash to stay afloat.", "replies": [{"id": "e7vr8eq", "text": "Yep.. Maybe a way around it would be to have the LL do the work before delivery.", "replies": [{"id": "e7ydh35", "text": "This makes a lot of sense and I hadn't considered this... thank you. Will not ask for half up front.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "e7vtmlc", "text": "OP-How about you just request a construction draw? This is more often than not what occurs anyways.", "replies": [], "depth": 1}, {"id": "e7wbulw", "text": "You could....Ask for more free rent on the front end. Ask for an early occupancy clause. Negotiate for all or at least an agreeable portion of unused TI to go to rent credit. TI converted to cash is LL foolishness, may backfire on your credibility. If you need cash now, call JG Wentworth, 877-CASH-NOW", "replies": [], "depth": 1}, {"id": "e7wexs1", "text": "You could request that the landlord reimburse your contractor directly on a certain draw schedule. Giving you the funds upfront is risky, it would be like paying a contractor upfront - you have no leverage to make sure the work gets done.\n", "replies": [], "depth": 1}, {"id": "e7xaf42", "text": "Ask for the landlord to handle build out? \nI\u2019m guessing this is retail space, otherwise landlord could easily just handle construction.", "replies": [], "depth": 1}, {"id": "e7xjhhq", "text": "Think about it from a landlord risk perspective: what would the landlord gain by giving you cash vs an allowance? Nothing, it's the same money to him. But think about his risk: what if you took the money and ran? What if you do a terrible job building out the space then run out of money? What if you default 6 months in? That's more risk than any landlord I know would take. In addition, since that money should be six one way and half a dozen another to you then why would you ask for that? If I were a landlord I'd have many questions this ask would prompt. Is it negotiable? Literally everything is. Should you ask that? I wouldn't at all. Asking your broker to ask that is like asking a broker to make a low ball offer on a property you both know won't trade at anything less than market. It'll weaken your negotiating position at best and could create perceived risk the landlord isn't willing to take on (meaning he'll move on to another prospective tenant). ", "replies": [], "depth": 1}, {"id": "e7yd7kn", "text": "Hey everyone, thanks for the great tips. I do have enough cash up front to cover build-out, even without the TI at all actually but my thinking on this was if he is willing to provide some, which he is, why not? You've given me some good reasons though.  \n\nWhere I am locally permits are a hassle and time-consuming process (as mentioned by over a dozen architects I've spoken with) so I may push harder for free rent instead.  \n\nI understand from the landlord's perspective it may be risky if I took the cash and ran. I guess I hadn't even thought of that since I have no intention of doing that..", "replies": [], "depth": 1}]