🇺🇸United States

Uncollected or delayed TIA reimbursements from landlords

2 verified sources

Definition

Where leases treat TIA as a receivable or lease incentive, tenants frequently fail to follow up when the landlord does not pay on the expected date, causing delayed or lost reimbursements. This creates unreconciled tenant improvement receivables and under‑realized incentives.

Key Findings

  • Financial Impact: Individual TI receivables often run into hundreds of thousands of dollars per lease; missed or long‑delayed payments can leave six‑ or seven‑figure balances outstanding across a multi‑site tenant.[3][5]
  • Frequency: Monthly (every time a TIA milestone payment is scheduled)
  • Root Cause: Lease accounting systems are not tied to cash application, so when the expected TIA payment date passes, discrepancies are only found during manual reconciliations; tenants rely on estimates of when cash will be received and do not have automated exception alerts.[5]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Leasing Non-residential Real Estate.

Affected Stakeholders

Corporate controllers, Lease accountants, Real estate finance teams, Landlords’ accounts payable, Tenants’ accounts receivable/treasury

Deep Analysis (Premium)

Financial Impact

$100,000-$1M+ per lease cycle × 100-500 active leases = $10M-$500M+ in aggregate delayed/lost TIA reimbursements across national chain • $100,000-$500,000 per lease; government multi-site portfolios: $1,000,000-$5,000,000+ in receivables; float costs; audit findings for unreconciled assets • $100,000-$500,000 per unit; fast-growing chain (50-200 units) carries $5,000,000-$100,000,000 in TIA receivables; delayed reimbursement starves expansion budget; working capital crisis during aggressive growth phase

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Current Workarounds

AR Specialist maintains TIA receivable aging in Excel; manually pulls lease documents from shared drive to match invoice to receivable; sends email to FM asking 'Is this paid?'; AR holds invoice to apply payment when landlord remits; no workflow ticket system • CAM Reconciliation Analyst tracks operating expenses and CAM charges, but TIA receivable lives in different system (accounting); Real Estate team owns lease terms; no cross-functional sync; energy/sustainability team requests efficiency improvements but has no visibility into TIA payment status • Construction Manager maintains separate spreadsheet per location; legal team sends follow-up emails sporadically; some locations use group chat (WhatsApp/Slack) to flag 'did we get paid?'

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Forfeited tenant improvement allowance due to poor tracking

Common TIAs range from $10–$50 per square foot; for a 10,000 sq ft space this is $100,000–$500,000 of which a material share can be forfeited if deadlines or documentation are missed.[1][6][10]

Budget overruns on tenant improvements from weak TIA expense tracking

For a TIA of $30–$50 per square foot on a 10,000 sq ft space ($300,000–$500,000), overruns of 10–20% are common in construction projects, equating to $30,000–$100,000 per build‑out.[2][6][8]

Overpaying contractors due to inadequate invoice auditing

Overbilling in construction has been documented in industry studies at several percent of project value; on TI budgets of $100,000–$500,000 this can translate to $5,000–$50,000 per project in excess payments.[8]

Rework and additional spend from non‑compliant improvements

Rework on commercial interiors frequently runs in the tens of thousands per location; for a mid‑size TI project, needing to redo 10–15% of work can cost $20,000–$75,000 plus potential loss of TIA reimbursement tied to the non‑compliant work.[1][6]

Delayed TIA reimbursements extending time-to-cash

For TIAs of $150,000 or more per lease, delays of 3–6 months in reimbursement represent a significant financing cost; the implicit cost of capital on these delayed inflows can reach tens of thousands annually for multi‑location tenants.[3][5]

Delayed openings and lost rent or sales from TI process bottlenecks

For retail or restaurant tenants with potential sales of tens of thousands per week per location, even a 4‑week delay can mean $100,000+ in lost revenue; landlords may lose comparable rent during delayed commencements.

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