A tenant improvement allowance is money the landlord agrees in the lease to put toward building out your space, taking it from its delivered condition to one you can actually use. The electrical work, from new circuits, panels and lighting to emergency lighting and equipment connections, is usually one of the largest pieces the allowance has to cover, and the one most likely to hold surprises in an older building.
The allowance is a negotiated number, and how far it goes depends on what the landlord delivers before it starts. This guide is not legal advice; your broker and attorney handle the lease. It explains how the electrical side fits, where the line between base building and tenant work usually falls, and what to have an electrician price while you still have leverage.
What a TI allowance is, in plain terms
One of the few places the terms are written down in public is the federal government's leasing guidance. The U.S. General Services Administration's Pricing Desk Guide defines tenant improvements as "the finishes and fixtures that typically take space from the shell condition to a finished, usable condition," and describes the TI allowance as the funding source that lets the space be built out for occupancy. It also notes the allowance is commonplace in the commercial real estate market. Private leases are not bound by GSA's definitions, but the concepts are the same.
Allowances are usually expressed per square foot of leased area. They can be paid in different ways: the landlord may build the space and draw down the allowance, or the tenant may build it and be reimbursed against invoices and lien releases. Which one applies, what the money can be spent on, and when it expires are all lease terms, so read them before assuming anything.
The work letter is where electrical gets decided
The work letter, usually an exhibit to the lease, is the document that matters most to the electrical scope. It typically sets out:
- Landlord's work: what the landlord completes at its own cost before handover, often described as the base building or shell.
- Tenant's work: everything else, paid for from the allowance and then by the tenant.
- The allowance amount, what it may be spent on (design, permits and construction, or construction only), and the deadline to use it.
- Approvals: the landlord's right to review drawings, approve contractors and set building rules for after-hours work, shutdowns and roof access.
The vaguer the description of landlord's work, the more of the electrical cost tends to land in the allowance. "Electrical service to the premises" can mean a fully sized panel with capacity for your use, or a conduit stub and a promise.
Base building versus tenant scope: where electrical usually falls
GSA's guide draws the line clearly enough to use as a benchmark. Its shell definition for general-use buildings includes base-building electrical systems that are complete and functional, and electrical power distribution panels and breakers in an electrical closet, with capacity at 120/208 volts, three-phase, four-wire, providing 4 watts per usable square foot excluding lighting and HVAC. Its list of typical tenant improvements includes electrical wiring, outlets and horizontal conduit within the tenant's space and to the building core, fire alarm wiring and devices within the space, and supplemental power above the base-building capacity.
Commercial leases in South Florida vary far more than that, but the same questions apply. A useful way to split it:
| Usually base building | Usually tenant improvement | Often negotiated |
|---|---|---|
| Utility service and main switchboard | Branch circuits, receptacles and equipment connections in the suite | A new or larger panel for the suite |
| Meter or meter position for the suite | Lighting layout and controls for your plan | Extra capacity above the building standard |
| Common-area lighting and life safety | Emergency and exit lighting to suit your layout | HVAC equipment and its electrical connection |
| Fire alarm system backbone | Fire alarm devices within the space (by a fire alarm contractor) | Restrooms and their exhaust fans |
| Core pathways for power and data | Data cabling and pathways within the suite | Sign circuit and exterior sign power |
What to get priced before you sign
The time to find out what the electrical work will cost is before the allowance is fixed, not after. A site walk with an electrician and your equipment list should answer:
- How much capacity the suite has. The panel size, the service feeding it, and whether the building has capacity left to give you more. A restaurant, salon, medical office or light industrial user can need far more than the building standard.
- Whether the panel has room. A full panel means a new one, and possibly a new feeder from the main switchboard.
- How the suite is metered. Its own meter, a submeter, or power included in rent. Adding a meter involves the utility.
- What life-safety lighting exists. Emergency and exit lighting that suited the last layout may not suit yours.
- What is being left behind. In second-generation space, the condition of existing wiring, panels and fixtures, and whether earlier work was permitted.
- What the landlord requires. Approved contractors, after-hours rules, shutdown notice, roof access and insurance requirements all affect price.
- Who pulls the permit and where. Miami-Dade's building department notes that each of the county's 35 municipalities has its own building official with jurisdiction over permitting and inspections; the county covers unincorporated areas. Plan review timelines differ from one jurisdiction to the next.
With that in hand, the rough cost of the electrical scope can be compared against the proposed allowance, and your broker can negotiate the gap, or push items like a larger panel into the landlord's work.
The electrical surprises that eat an allowance
The service is too small
The most expensive surprise. If the building's service cannot support your load, the fix is a service upgrade, which involves switchgear, the utility and a schedule measured in months. We cover the signs in when a business outgrows its electrical service.
The panel is full or tired
Old panels with no spaces, obsolete breakers or signs of heat are common in second-generation space. Replacing a panel is a routine job, but it needs to be in the budget.
Emergency and exit lighting are missing or wrong
New walls change egress paths, and emergency and exit lighting has to follow them. In an older space the existing units may also have failed batteries. This is part of our life-safety electrical work.
Old wiring in second-generation space
Abandoned circuits, unlabeled panels, undersized conductors, and wiring from a previous tenant's unpermitted work all turn up when ceilings open. Inspectors will expect it to be corrected or removed.
Equipment nobody asked about
Kitchen equipment, imaging machines, compressors, server racks and sign power each need dedicated circuits, sometimes at a different voltage. Our tenant equipment power page covers the common ones. An equipment list with nameplate data at the start avoids most of these.
Related questions
If you are still comparing spaces, the difference between a vanilla shell and a turnkey delivery decides how much of the electrical work the allowance has to carry, and our list of electrical questions to ask before signing a commercial lease goes through the landlord conversation in more detail.
Get the electrical scope priced before the allowance is fixed
KRW Electric (EC13012832) walks prospective spaces with tenants, brokers and general contractors, and prices the electrical scope of commercial remodels and tenant improvements across Miami-Dade, Broward and Palm Beach. Send us the address, the draft work letter and your equipment list, or call (305) 359-7312, and we will tell you what the electrical work involves before you commit to the number.
Reviewed by Kyle White, KRW Electric Company LLC — licensed electrical contractor EC13012832.
