If you’re a commercial property owner, asset manager, or tenant rep working a deal in Atlanta, “tenant improvement” — TI — comes up in every lease conversation and rarely gets explained clearly. This is a practical guide to how TI projects run in the Atlanta market: shell condition, who pays for what, timelines, and where budgets break.
What “tenant improvement” actually means
A tenant improvement (TI) is any construction work done to a leased commercial space to make it usable for a specific tenant — typically office, retail, restaurant, or medical. The classic examples:
- A blank shell becoming a Class A office floor
- A vanilla-box retail space becoming a restaurant with a kitchen, dining room, and bar
- An existing office floor getting demolished and rebuilt for a new tenant
- Medical office or dental fit-up with specialized MEP
Sometimes TI is light (paint, carpet, new partitions). Sometimes it’s a near-ground-up rebuild within the four walls of the lease.
Shell Condition: What You’re Actually Starting From
Before you can budget anything, you need to know what condition the landlord is delivering the space in — this gets thrown around loosely in lease negotiations and it changes the scope and cost dramatically:
- Cold shell: Exterior walls, roof, and structure only. No partitions, HVAC distribution, ceiling grid, or restrooms beyond a core stub.
- Warm shell / vanilla box: HVAC roughed in, restrooms to code minimums, ceiling grid may be in — generally ready for tenant finishes.
- Second-generation space: A prior tenant’s improvements remain — carpet, partitions, sometimes a kitchen. Reusable finishes save money; obsolete ones add a demo line.
Ask for the shell condition in writing before you price a TI budget. “It’s basically ready to go” and “cold shell” produce very different numbers.
The TI allowance — the most confusing part
TI work is almost always negotiated with a “TI allowance” — a dollar amount per square foot the landlord agrees to contribute to the build-out as a lease incentive. In metro Atlanta, general market ranges typically look like:
- Class A office, 5+ year lease: $40–$90/sf TI allowance (sometimes more for anchor tenants)
- Retail / restaurant, 7-10 year lease: $30–$75/sf, often higher for restaurant build-outs with kitchen scope
- Medical / dental: $50–$120/sf, depending on plumbing and MEP intensity
- Industrial / flex: $10–$25/sf, lower because base condition is closer to usable
These are general market figures that move with lease term, tenant credit, and building class — not a quote, and any real project needs its own conceptual estimate. A common mistake tenants make: assuming the TI allowance covers their entire build-out. It rarely does, especially for restaurants and medical. The tenant typically funds the gap from their own capex.
Landlord’s Work Letter vs. Tenant-Controlled Allowance
This is where a lot of confusion lives, and leases rarely spell it out plainly. Two common structures:
- Landlord-built: The landlord’s GC performs the work per an agreed scope (the “work letter”); tenant input is mostly plan approval and finish selections. Faster to start, less control over GC and schedule.
- Tenant-controlled allowance: The tenant hires their own GC and architect and gets reimbursed through draw requests tied to percentage of completion, backed by lien waivers, with the landlord or lender approving each draw.
Tenant-controlled is more common for larger, particular build-outs (restaurants, medical, brand standards) since it puts the tenant in charge of who’s in their space — but the tenant also carries the float between draws.
What drives a TI budget
Actual construction cost varies wildly beyond just the allowance. The big drivers:
- MEP density. How much new electrical, plumbing, HVAC are you running? Restaurant kitchens and medical offices are MEP-heavy. Open-plan offices are MEP-light.
- Demolition scope. Reusing the existing shell is cheaper. Demoing partitions, ceiling grids, and MEP rough-in costs more.
- Finish level. Class A finish (millwork, stone, premium flooring) costs 2-3x basic Class B finishes.
- Specialty permits. Restaurants need hood, grease, and health permits. Medical offices need life safety and accessibility compliance. Each adds time and cost.
- ADA / accessibility compliance. Path-of-travel requirements and accessible route upgrades get triggered by scope of work — sometimes reaching outside your suite into common corridors or entries you didn’t budget for.
- Building constraints. After-hours work rules, freight elevator access, dust containment — all affect labor cost.
Realistic TI timelines
A clean office TI in metro Atlanta — say 8,000 sf — typically runs:
- Design & permitting: 4-8 weeks (architect/engineer drawings, City of Atlanta permit review)
- Demolition: 1-2 weeks
- Rough-in (framing, MEP): 3-5 weeks
- Above-ceiling inspection & close-up: 1 week
- Finishes (drywall, paint, flooring, doors, millwork): 3-5 weeks
- Punch list & final inspection: 1-2 weeks
Total: roughly 14-22 weeks from contract execution to certificate of occupancy.
Restaurant TI runs longer — 22-32 weeks is normal, primarily because of MEP density, kitchen equipment lead times, and health department coordination.
Permitting in Atlanta — the realities
City of Atlanta commercial permits go through the Office of Buildings. Review timelines depend on workload and project complexity:
- Simple TI (no MEP, no occupancy change): 2-4 weeks
- Standard TI with MEP: 4-8 weeks
- Complex (assembly, restaurant, medical): 6-12+ weeks
- Plan revisions: add 2-4 weeks each round
Surrounding jurisdictions vary — DeKalb, Fulton (unincorporated), Cobb, Gwinnett each have different review queues. Sandy Springs, Brookhaven, and Dunwoody have their own permitting offices.
Smart tenants hire their architect and GC before lease execution if possible — getting a permit package ready to submit on lease commencement saves 4-6 weeks of dead lease time.
How to pick a TI contractor
Quick checklist for vetting GCs on a TI project:
- Active commercial GC license in Georgia (#GCCO009212 is verifiable for us)
- Insurance certificates — general liability $1M+, workers comp, auto, builders risk
- Bonding capacity — should be available on request for any meaningful TI
- Reference projects — at least two similar-size, similar-scope, recent completions
- Local sub relationships — TI work depends on subs who can be on-site fast and reliably
- Permit experience in your jurisdiction — Atlanta proper vs. DeKalb vs. North metro all run differently
- Punch-list reputation — ask references how clean the punch list was and how fast it closed
- Draw request process — on a tenant-controlled allowance, ask how the GC documents percentage-of-completion and handles lien waivers. A GC unfamiliar with draw schedules will slow your reimbursements down.
We run commercial build-outs and TI work across metro Atlanta as the GC managing licensed subs — see completed projects for examples of finished work.
Common mistakes
- Signing a lease with a low TI allowance assuming the GC will “just work with it.” Run a real conceptual budget before lease execution, not after.
- Hiring the cheapest bidder. TI work is highly variable and the lowest bid almost always omits scope that resurfaces as change orders.
- Not building float into the schedule. Permit revisions, long-lead MEP equipment, and inspector availability all add days you didn’t plan for.
- Ignoring after-hours work rules. Many Class A buildings require demo and noisy work after 6 PM. That’s a 20-30% labor premium that has to be in the budget.
- Not reading the restoration clause. Some leases require removing improvements and restoring the space to original condition at lease end — plan for that cost on day one.
- Skipping lien waivers on a tenant-controlled draw. Messy paperwork delays draws and stalls the job.
Frequently Asked Questions
Who typically hires the TI contractor — the landlord or the tenant? Either can, depending on the deal structure. Under a landlord’s work letter, the landlord’s GC does the build and the tenant approves finishes. Under a tenant-controlled allowance, the tenant hires their own architect and GC and gets reimbursed via draw requests. Check your lease’s work letter section before assuming which one applies.
What’s the difference between a TI allowance and a capital improvement? A TI allowance is a lease incentive tied to a specific tenant’s build-out, paid as a lump sum or through draws. A capital improvement is the landlord’s own long-term investment in the building (roof, parking lot, common areas), not tied to any one tenant and not part of lease negotiations.
Do I have to restore the space to its original condition when my lease ends? Depends on the restoration clause. Some require full restoration, some let improvements stay as-is, and some split the difference for items like kitchen equipment. Have your attorney flag this before signing — it affects your total cost of occupancy.
Can I use my own architect and GC, or do I have to use the landlord’s? On a tenant-controlled allowance, generally yes, subject to the landlord’s approval rights (insurance minimums, license verification, sometimes a pre-approved list). On a landlord’s work letter, the landlord’s GC does the work and your input is limited to plans and finishes.
What happens if my build-out costs more than the TI allowance? The tenant funds the gap, usually out of pocket or through a separate capex budget. This is the most common source of TI sticker shock — get a real conceptual estimate against your actual scope before you sign the lease, not after.
How long before lease commencement should I start the TI process? As early as possible, ideally before you sign. Getting your architect and GC involved during lease negotiation lets you submit for permit on day one of the lease instead of starting design from scratch — that can save 4-6 weeks of paying rent on a space you can’t use yet.
Working on a TI project in Atlanta? Integrity CRR runs commercial tenant improvements across metro Atlanta — Class A office, retail, multi-tenant, medical. Request a free estimate or call (833) 423-6255.