Client story
Centralized tracking of TI allowances results in significant cost savings
JLL established a process to ensure a U.S. healthcare client took advantage of tenant improvement allowances, leading to material cost savings and avoidance
Size
500 leases, 120 subleases
Value
$20 million in savings since 2010
Spotlight
Established efficient process to ensure usage of TI allowances
Challenge
This U.S. healthcare client did not have a centralized portfolio-wide process to track and monitor tenant improvement (TI) allowances. TI allowances often expire and cannot be used if they are requested beyond a specific date, resulting in missed savings.
Approach
JLL’s Lease Administration team reviewed the client’s portfolio and identified several locations that had unused TI allowances.
- Reviewed abstracted information in the client’s portfolio database to identify which TI allowances could be taken as rent credits and which must be requested for reimbursement.
- Provided the client with the analysis to confirm if the amounts were already reserved for future projects and, if the lease allowed, if the amounts could be taken as rent credits.
- Notified the applicable landlords that unused TI allowances would be taken as credits against rent.
- Established an efficient process with the client to ensure future TI allowances are used as early as possible.
Results
- Identified 30 locations with unused TI allowances to use as rent credits.
- Achieved cost savings and avoidance of $566K from processing TI allowance rent credits for ten leases.
- Generated $20 million-plus total cost savings and avoidance since 2010.
Learn more about JLL Lease Administration.
