Tenant Improvement Allowance on a Short-Term Office Lease in NYC

Why the length of the lease sets the allowance

An allowance is not a gift. It is money the landlord lays out on day one and earns back across the term. Spread over ten years, a large contribution adds little to each month. Spread over two, the same contribution would have to come back in 24 payments, and few rents can carry that.

That is why floors needing heavy construction come with long lease requests, and why a landlord shown a short term will steer you toward space that is finished. The allowance entry explains how the money is negotiated.

What a 12, 24 or 36 month deal can expect

• At 12 months: the floor as it stands. Expect no contribution, and a custom job, at 10 to 16 weeks, would use up a large part of the term.
• At 24 months: some landlords will fund a reduced amount, and the usual result is that the tenant covers the difference.
• At 36 months: the most room to ask. Expect a choice between a smaller allowance and a higher rent per square foot that repays the landlord sooner.

On all three, concessions are thinner than on a long lease, and rent typically runs 10 to 20 percent above the long-term equivalent. If a landlord offers more improvement money in return for a higher rent, treat it as a loan and work out what it costs.

Getting a floor that fits without landlord money

• A prebuilt floor. The landlord has already built a pantry, meeting rooms and an open area, and recovers the cost through the rent. Minimum terms are usually shorter than on raw space.
• Light customization. Paint, furniture and small changes with the landlord's consent, which keep the speed that made the floor attractive.
• Landlord-built space. In a turnkey deal the owner's contractor builds to an agreed plan. On a short term that plan has to be modest.

A fourth route is to sublet from a tenant whose floor is already finished. The construction comes with it, and so does the layout, largely as that tenant designed it. The short-term lease playbook compares these structures, and the prebuilt entry explains what the lease on one looks like.

Floors that need no allowance to be usable

The simplest answer to a short term is to take construction out of the deal. A team can usually be at its desks two to four weeks after signing for a furnished or prebuilt floor, with nothing to draw down and no work letter to negotiate. The live block below lists the furnished and prebuilt floors on our book, with the size and asking rent of each.

Watch one clause on any of them. A restoration requirement can make you undo even small changes at the end of a short stay, so ask to return the floor in the condition you received it.