What TI and Free Rent Look Like in Keller Right Now
Tenant improvements and free rent are key negotiation points. See what landlords are currently offering in the Keller commercial market.
Understanding Tenant Concessions
When negotiating a commercial lease, the stated rental rate is just one piece of the puzzle. Tenant improvement (TI) allowances and free rent periods significantly impact your effective occupancy cost. Understanding what's available in today's Keller market helps you negotiate from a position of knowledge.
Landlord concessions fluctuate with market conditions. When vacancy is high, concessions increase; when space is tight, they shrink. The 2026 Keller market shows nuanced conditions varying by property type and quality, creating opportunities for informed tenants.
What is Tenant Improvement (TI) Allowance?
A TI allowance is a dollar amount per square foot that the landlord contributes toward customizing the space for your use. This might cover construction of offices, installation of specialized systems, flooring, paint, and other improvements. The allowance is typically paid as a reimbursement after work is completed or funded directly through landlord-managed construction.
Important: TI allowances aren't free money. Landlords amortize these costs into your rent over the lease term. A higher TI allowance often correlates with slightly higher rent or longer lease commitments. Understand this trade-off when evaluating deals.
Current TI Allowances in Keller (2026)
TI Allowance Ranges by Property Type
| Property Type | Relative TI Allowance | Notes |
|---|---|---|
| Class A Office | Largest of the five types | Higher for longer terms, credit tenants |
| Class B Office | Mid-range | Varies widely by building condition |
| Retail (Inline) | Mid-range | Higher for restaurant/food service |
| Retail (Pad Site) | Little or none | Often tenant-built shells |
| Industrial/Flex | Small | More for office-heavy layouts |
What is Free Rent?
Free rent (also called rent abatement) is a period at the beginning of your lease during which you don't pay base rent. This concession helps offset moving costs, provides time for buildout, and reduces your effective rent over the lease term.
Free rent may be "gross" (no rent or expenses due) or "net" (no base rent but NNN/CAM still due). Always clarify which applies to your deal. Gross free rent is more valuable but less common.
Current Free Rent in Keller (2026)
Free Rent Expectations by Lease Term
| Lease Term | Typical Free Rent | Strong Credit Tenant |
|---|---|---|
| 3 Years | Negotiated per deal | Negotiated per deal |
| 5 Years | Negotiated per deal | Negotiated per deal |
| 7 Years | Negotiated per deal | Negotiated per deal |
| 10 Years | Negotiated per deal | Negotiated per deal |
Calculating Your Effective Rent
To compare deals accurately, calculate your "effective rent" which factors in TI and free rent. Here's a simplified example:
How to compute effective rent (method only, no market figures)
1. Total face rent
Annual rent per square foot, times the square footage, times the number of lease years, including any scheduled escalations.
2. Less free rent
Monthly rent times the number of abated months.
3. Less TI allowance
Allowance per square foot times the square footage.
4. Net effective rent
The remainder, divided by the square footage and the lease years, is the rent you are really paying. Compare that number across buildings, not the face rate.
Factors That Increase Concessions
- Longer lease terms: Landlords amortize costs over more years, enabling larger upfront concessions.
- Strong credit/financials: Lower risk tenants receive better treatment.
- Large space requirements: Filling big blocks of space is challenging; landlords pay for the privilege.
- Vacant buildings: Landlords with empty space have more motivation to deal.
- Competitive situations: Presenting multiple options creates negotiating leverage.
- Second-generation space: Space that's already built out requires less landlord investment.
Negotiation Strategies
1. Know Your Market
Understanding current concession levels prevents leaving money on the table. The ranges in this article provide benchmarks, but specific buildings may offer more or less based on their circumstances.
2. Create Competition
Tour multiple properties and obtain proposals from several landlords. Nothing motivates concessions like the credible threat of losing a deal to a competitor.
3. Trade for What Matters
If your buildout is simple, you might trade TI allowance for more free rent or lower base rent. Customize the package to match your actual needs rather than accepting standard offerings.
4. Document Everything
Ensure TI allowances are clearly documented in the lease, including conditions for payment, approval processes, and deadlines. Vague language leads to disputes.
Conclusion
TI allowances and free rent represent significant value that can meaningfully impact your total occupancy cost. The 2026 Keller market offers reasonable concession opportunities for tenants who understand what's available and negotiate effectively.
Don't accept the first offer. Landlords expect negotiation and build room for concessions into their initial proposals. Working with experienced representation helps ensure you capture the full value available in today's market.