Gym buildouts are expensive. Plumbing, showers, rubber flooring, and HVAC upgrades can quickly exceed six figures. Tenant improvements (TI) are landlord contributions that help offset these costs. Negotiating them well can free up capital for other needs.
What to know
TI usually comes in one of three forms:
- A cash allowance per square foot.
- Direct work completed by the landlord’s contractors.
- Rent credits applied to early months.
Each option affects your control over the project. Cash allowances give you flexibility, while landlord-managed work may save time but reduce control.
Action steps
- Ask for a TI allowance that matches your buildout needs. Use contractor estimates to justify the request.
- Clarify how TI is paid — upfront, reimbursed after invoices, or credited against rent. Cash flow timing is critical.
- Negotiate TI before you finalize base rent. Landlords may be more flexible on improvements than rent.
- Ensure payment is tied to inspections or permits so funds are released on time.
- Define ownership of improvements at lease end.
Numbers to run
In many markets, TI ranges from $10 to $40 per square foot. On a 5,000-square-foot space, that could mean $50,000 to $200,000 toward your buildout. That money can make or break your launch budget.
Questions to ask
- What is the total TI allowance per square foot?
- When and how is it paid?
- Who owns the improvements after the lease ends?
- What happens to unused TI funds?
Next step
TI should be negotiated with the same focus as rent. A strong allowance reduces your upfront cash needs and helps you start stronger.