If the second half of your commission is sitting frozen, look at the build-out. A tenant improvement allowance pays for that build-out, the tenant usually can't move in until it is finished, and on many leases your second commission payment waits for move-in. This guide covers what a TI allowance is, how it is calculated and paid out, what it does and doesn't cover, and how it sets the timing of your commission.
In short: a tenant improvement allowance (TI or TIA) is money the landlord agrees to put toward building out the tenant's space, usually quoted per square foot. The tenant can't occupy until the work is done. When your commission pays half at execution and half at occupancy, the build-out the allowance funds decides when your second half arrives.
Cushman & Wakefield defines a tenant improvement allowance as "a pre-negotiated sum of money provided by the landlord or owner of the building to the tenant" for building out the space (Cushman & Wakefield). It is negotiated with the rest of the lease terms, and it is often one of the biggest concessions in the deal. You'll see it written as TI, TIA or TA. There's a short definition in the glossary entry for tenant improvement allowance.
A TI allowance is usually expressed per square foot, so the total is the allowance rate times the leased area (Cushman & Wakefield). For example, an allowance of $30 per square foot on a 5,000 square foot space comes to $150,000 (Speed Commercial Real Estate).
The first two rows are the published examples from First National Realty Partners and Speed Commercial Real Estate. The third is simple arithmetic to show the scale.
There is no single standard. The allowance depends on the market, the asset class, the condition of the space and the length of the lease, and it is negotiated deal by deal. One published range for a typical allowance is $5 to $30 per square foot or more (Speed Commercial Real Estate, 2023).
It helps to compare the allowance with what a build-out actually costs. Cushman & Wakefield's 2026 office fit-out cost guide puts US office fit-out costs at about $108 per square foot in Cincinnati at the low end and about $219 in San Jose at the high end, with US costs up 5% year over year (Cushman & Wakefield 2026 Office Fit-Out Cost Guide). When the allowance covers only part of that cost, the tenant pays the rest.
Allowances generally pay for hard construction costs such as drywall, electrical and plumbing (FNRP). Interior construction, electrical work, flooring and paint are typically covered. Furniture, fixtures, equipment and operating expenses are typically excluded (Cushman & Wakefield). The lease or work letter decides the exact list, so read it rather than assuming. The work letter is usually where those terms live.
Payment terms vary, so check the lease. In a common setup the tenant pays the construction costs as work progresses, and the landlord reimburses the tenant with the allowance once construction is complete (FNRP). Who runs the project also varies. When the landlord controls the improvements, it picks the contractor and oversees the work. Tenant-controlled build-outs are common with large companies that have specific needs or brand standards (FNRP). In a turnkey deal, the landlord takes on most of the responsibility for preparing the space (Speed Commercial Real Estate).
Each of these choices affects how long the build-out takes, and so how long the occupancy half of your commission waits.
Leasing commissions are often paid half when the lease is signed and half when the tenant moves in (Partners Real Estate). Your commission agreement sets the actual trigger, but where the second half is tied to occupancy, the chain looks like this:
So the size and complexity of the TI work largely sets how long your occupancy half sits. Light work on a second-generation space can move quickly. A heavy, permit-dependent fit-out can push occupancy out by months. That's why brokers in build-out-heavy asset classes, such as medical office, feel the wait most. The 50/50 trap explains why the split exists in the first place.
Build-outs slip for familiar reasons: permits take longer than planned, long-lead materials and equipment arrive late, change orders add scope, and inspections create dependencies. Each week the work runs is a week your occupancy half stays unpaid. The wider list of causes is in the guide on why your commercial lease commission is delayed.
The landlord funds improvements up to the agreed allowance. Costs above the allowance are generally the tenant's, unless the lease says otherwise. In a turnkey deal the landlord delivers the finished space.
It varies by market, asset class and space condition. One published range is $5 to $30 per square foot or more (Speed Commercial Real Estate). For comparison, 2026 US office fit-out costs ran from about $108 to about $219 per square foot depending on the city (Cushman & Wakefield).
Interior walls, electrical and plumbing work, flooring, ceilings and lighting, and paint. Furniture and equipment usually aren't covered by the allowance.
It depends on the lease. Often the tenant pays contractors as the work progresses and the landlord reimburses the allowance once construction is complete (FNRP).
Indirectly, yes. The allowance funds the build-out, and the build-out delays occupancy. If your second payment is triggered by occupancy, the more TI work there is, the longer that half usually waits.
Not from the payor, whose trigger is occupancy. A commission advance lets you sell that earned second half for cash before occupancy, which is the most direct way around a long build-out.
This guide is general information for commercial real estate brokers and is not financial, tax, or legal advice. Allowance amounts, payment terms and build-out timing vary by lease. Sources were checked on 1 October 2026.
