Over the past 18 months, the balance of power in commercial real estate leasing has shifted, according to Michael Rait, Founder and President of BR Design Associates. Landlords, responding to tighter supply and steady demand, are no longer simply offering cash allowances for tenant improvements. Instead, they are providing more substantial, standardized build-out packages—often categorized as “platinum,” “gold,” and “silver” tiers—that streamline the leasing process and shift more control over construction quality to building owners.
“Landlords provide a lot more of the projects now,” Rait says. “They can give funds, or they will build it. We see a lot more of the turnkey type of things, where the landlord is giving the tenant an incentive, like, ” We’ll build the space for you. This is our standard. This is how much the rent is.”
This move toward landlord-driven build-outs is not just about increasing tenant improvement allowances but about changing how these improvements are structured. Many landlords now offer tiered packages that let tenants choose the level of finishes and amenities in their space, with corresponding rent adjustments. This approach keeps landlords in control of the construction process and ensures consistent quality across their portfolios.
“Some landlords have different levels of build out,” Rait explains. “You can have a platinum, a gold, and a silver type of level. If you want platinum level, you’re going to pay a little more in rent to get there. It’s part of negotiations.”
Rait notes that this system benefits both parties. Landlords reduce risk and accelerate lease closings, while tenants receive higher-quality, move-in-ready spaces. Instead of negotiating every detail of a tenant improvement allowance, tenants select from pre-set packages that are clearly defined and professionally executed.
“The pre-built spaces are very nice, and the standards that the landlords are providing are very nice,” Rait says. “It’s not plain vanilla. It’s definitely a step or two up. It’s also a function of the rent. If it’s an A, A-minus building with high rents, it’s going to be a nice, nice build out.”
Rising construction costs are a key factor driving this shift. According to Rait, “In the past five years, since the COVID pandemic, there was not a lot of work, and then when work started picking up again over the past 18 to 24 months, the cost of products and everything has escalated. It’s much more expensive to build out space now than it was five years ago. But also, landlords are really stepping up and providing some nice installations for their tenants.”
For landlords, especially in high-end buildings with rents above $300 per square foot, investing in quality build-outs and amenities is now seen as a better strategy than leaving space vacant. Even in B and C buildings, Rait observes, owners are upgrading lobbies, common areas, and amenities to attract tenants and remain competitive.
This standardized approach enables landlords to benefit from economies of scale, reducing per-unit construction costs and achieving a consistent look and feel across multiple spaces. Individual tenant buildouts rarely match this efficiency or quality, according to Rait.
For tenants, the implications are significant. The tenant improvement allowance is no longer just a figure to negotiate. Instead, many tenants are now evaluating whether the landlord’s standard build-out meets their business needs. In most cases, Rait says, tenants are satisfied with these standards, eliminating the need for extensive customization or additional construction risk.
“More often than not, they’ll say, ’ That’s fine. We’ll use the standards, and we’ll build the space to whatever those standards are,” Rait observes. As a result, tenants can move in faster and with greater certainty about costs and quality.
For investors and developers, this trend signals a move away from bare-shell leasing. Turnkey or near-turnkey solutions are increasingly expected, and landlords who can deliver them efficiently are seeing a competitive advantage in attracting and retaining tenants.
Rait believes this tiered approach to tenant improvements is becoming a new market standard rather than a temporary trend. As more landlords adopt these packages, tenants are growing accustomed to selecting from pre-defined options rather than negotiating every element of a buildout. This standardization is changing the way commercial lease negotiations are conducted, with both sides prioritizing speed, quality, and predictability over custom solutions.
In today’s commercial real estate market, the introduction of platinum, gold, and silver build-out tiers is reshaping how deals are structured and executed. Landlords who adapt to this model are not only meeting tenant expectations but also protecting their investments in a more competitive, cost-sensitive environment.
