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TI allowances increasing, up more than 20 percent since 2015

  • Office construction has ramped up significantly in 2016 and 2017, reaching a cyclical high of nearly 2 million square feet in Q2 of 2017, prompting a surge in employment within the construction sector. And as we pointed out in last week’s snapshot, this increased demand led to a 11.7 percent increase in hard construction costs for prime office between 2015 and 2016.
  • Overall costs experienced by tenants has increased markedly. As a result, Landlords have increased TI allowances 21.3 percent since 2015 in order to stay competitive. 
  • Landlords looking for a reprieve  from high construction costs can find comfort in the movement towards creative office space. As JLL’s Tech Office Trends 2017 points out, fit out costs for creative office are on average 15 percent less than traditional office build outs.
  • Not only is creative office cheaper to build out, second generation tenant improvements for creative office space costs just one quarter of what Class A traditional office costs.  ​​

Source: JLL Research




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