Are Tenant Improvements and Leasing Commissions paid at the start of the tenant's lease by default?

Tenant Improvements and Leasing Commissions are typically considered upfront costs associated with securing a tenant for a property. When a lease is negotiated, these costs are often incurred at the commencement of the lease term, making it standard practice for them to be paid at the start of the tenant's lease.

This arrangement serves several purposes: it ensures that the space is tailored to the specific needs of the tenant, helping to make the property more appealing and functional for their use. It also provides an incentive for tenants to sign a lease, as they see the property as move-in ready, with improvements already in place. Leasing commissions, meanwhile, are fees paid to brokers who facilitate the rental process and are also typically settled at the lease's initiation.

While there may be circumstances in certain deals or specific lease structures where payments are staggered or made under different terms, the default assumption is that these costs are handled upfront. Thus, identifying the default approach as being paid at the start of the lease is accurate.