A tenant improvement is the construction done inside a leased commercial space to make it usable for a specific tenant: partitions, ceilings, flooring, lighting, heating and air distribution, plumbing and finishes. A TI allowance is the amount the landlord contributes, expressed as dollars per square foot.
Who runs it
Either the landlord delivers it finished, or the tenant manages it with an allowance. Tenant-managed means you pick the contractor and control the schedule. Landlord-managed means less cash out of your pocket up front. Both are common and neither is automatically better.
What it costs in Los Angeles
Office build-out commonly runs $60 to $120 per square foot and retail $80 to $150. Restaurants and medical suites run $200 to $450 per square foot or more because of hoods, plumbing at every room and dedicated air handling.
The thing that wrecks TI budgets
Accessibility upgrades. California requires upgrades to the path of travel, the entrance, restrooms and parking once a permit's valuation crosses a threshold, capped at a share of the project cost. It is the single most common item missing from a commercial budget, and it is not optional. We put it in every estimate whether or not anyone asked.
Los Angeles County figures, reviewed 2026-10-29 by America General Contractors, California contractor licence CSLB 1083262. Planning ranges, not a quote, and not legal advice. We confirm the current rules for your parcel before anything gets drawn.
