What are "tenant improvements" typically used for?

Tenant improvements are alterations or modifications made to a rental space to accommodate the particular needs and preferences of the tenant. This often includes changes such as installing specialized fixtures, altering layouts, or updating finishes to create a functional and appealing environment for the tenant's operations. These improvements are essential for ensuring that the rental space aligns with the tenant's business model and day-to-day requirements.

While tenant improvements can potentially enhance a property's market value over time, their primary purpose is to tailor the space to the tenant's specific operational needs. By focusing on customization, property managers and landlords can improve tenant satisfaction, which can lead to longer lease terms and lower turnover rates. This approach ultimately fosters a positive relationship between the landlord and the tenant.