Denver office TI allowances in 2026 range from $40–80/SF for Class A space and $25–50/SF for Class B, with CBD properties offering the highest packages due to competitive pressure. TI allowances increased 7% nationally in 2024 but still lag rising fit-out costs (up 4.7% YoY), meaning tenants typically face out-of-pocket costs beyond the allowance. Negotiate TI as part of total deal economics, not in isolation.
Key Takeaways
- Class A CBD TI: $60-80/SF; Class A Suburban: $40-60/SF; Class B: $25-40/SF
- TI allowances up 7% nationally in 2024, but fit-out costs up 4.7%, creating gap
- Landlords increasingly willing to fund turn-key build-outs to win tenants
- Bonus depreciation phaseout: Down to 40% in 2026, 0% in 2027 (plan accordingly)
- Negotiate TI alongside rent and free rent for optimal total package
Denver Office TI Allowances by Building Type and Submarket
TI allowances vary significantly by building class, submarket, and lease term. These are current Denver benchmarks:
| Building Profile | TI Allowance Range | 5-Year Term | 7-Year Term | 10-Year Term |
| Class A+ Trophy CBD | $70-100/SF | $70/SF | $85/SF | $100/SF |
| Class A CBD | $60-80/SF | $60/SF | $70/SF | $80/SF |
| Class A Suburban (DTC, GV) | $40-60/SF | $40/SF | $50/SF | $60/SF |
| Class A Cherry Creek | $50-70/SF | $50/SF | $60/SF | $70/SF |
| Class B CBD | $40-60/SF | $40/SF | $50/SF | $60/SF |
| Class B Suburban | $25-40/SF | $25/SF | $32/SF | $40/SF |
| Class C / Value | $15-30/SF | $15/SF | $22/SF | $30/SF |
Sources: Cushman & Wakefield Fit-Out Guide 2025, CBRE, Premises Commercial Real Estate
Actual Fit-Out Costs vs. TI Allowance
Understanding real build-out costs helps you negotiate and budget for any gap:
| Build-Out Level | Cost/SF | What It Includes | TI Gap (Class A) |
| Cosmetic Refresh | $15-30/SF | Paint, carpet, minor repairs | Allowance covers |
| Light Renovation | $40-60/SF | Above + new lighting, some walls | Allowance covers |
| Standard Build-Out | $75-100/SF | Above + full office layout, HVAC mods | $0-40/SF gap |
| High-End Professional | $100-150/SF | Premium finishes, custom millwork | $20-70/SF gap |
| Creative/Tech | $120-175/SF | Open plan, specialty MEP, amenities | $40-95/SF gap |
| Executive/Legal | $150-200/SF | Private offices, high-end finishes | $70-120/SF gap |
Sources: Buildout.com, Cushman & Wakefield, CBRE Fit-Out Cost Guide
TI Allowance Delivery Methods
How you receive and manage TI dollars affects your control and risk:
| Method | How It Works | Pros | Cons | Best For |
| Dollar Allowance | Landlord reimburses up to $X/SF | Tenant controls quality | Must manage project, fund overages | Experienced tenants |
| Turn-Key Build-Out | Landlord builds to spec at no cost | No upfront capital, risk transfer | Less control, may cut corners | Smaller tenants |
| Building Standard | Landlord provides preset finishes | Simple, predictable | Limited customization | Cost-sensitive tenants |
| Work Letter Credit | Unused TI applies to rent | Flexibility if minimal work | Rarely offered, negotiate | Move-in ready spaces |
| Above-Standard TI | Amortized into rent above base | Higher finish level | Higher rent, locked in | Premium build-outs |
TI Tax Considerations for 2026
Bonus depreciation phaseout significantly impacts TI economics:
| Tax Year | Bonus Depreciation | Impact | Strategy |
| 2024 | 60% | Majority immediate deduction | Accelerate TI if possible |
| 2025 | 40% | Reduced immediate benefit | Evaluate timing |
| 2026 | 20% | Mostly 15-year amortization | Focus on landlord-funded TI |
| 2027+ | 0% | Full 15-year amortization | Shift burden to landlord |
Source: IRS Section 168(k), JROC Construction tax guidance
With bonus depreciation phasing out, tenants should prioritize landlord-funded turn-key build-outs where the landlord bears the cost and depreciates over the asset life, rather than taking cash TI allowances that require tenant capital and slower recovery.
TI Negotiation Strategy
TI should be negotiated as part of total deal economics, not in isolation:
| Negotiation Tactic | How to Use It | Potential Value |
| Compete properties | Get 3-5 proposals, use to leverage TI up | +$10-20/SF |
| Extend lease term | Offer 7 years vs. 5 for higher TI | +$10-15/SF |
| Accept higher rent | Trade $1/SF rent for ~$7-8/SF TI | Economic equivalence |
| Take turn-key | Landlord builds to your spec, zero out-of-pocket | Risk transfer |
| Document build costs | Get contractor estimates before negotiating | Justify higher ask |
| Push unused to rent | If minimal TI needed, apply to rent credit | Cash flow benefit |
SVN Denver Perspective on TI Allowances
In the current Denver office market, TI allowances are highly negotiable given the 26% vacancy rate. We counsel tenants to get detailed construction estimates before negotiating so you know your actual costs, then use competitive bidding to push TI packages higher. For 2026, consider turn-key build-outs where landlords fund and manage construction—this transfers risk, avoids the bonus depreciation hit, and often results in better execution. Remember: a $10/SF TI increase on 10,000 SF is $100,000—worth the effort to negotiate properly.
Common TI Mistakes to Avoid
- Accepting TI in isolation: Negotiate TI as part of total package (rent, free rent, TI together)
- Underestimating costs: Actual build-out often exceeds allowance by $20-50/SF
- Ignoring soft costs: Architecture, permits, project management add 15-20%
- Missing deadlines: TI allowance often expires if not drawn within lease term
- Skipping competitive bids: Landlords compete; use it to push TI higher
- Taking cash over turn-key: In 2026, turn-key often provides better value and risk transfer
Bottom Line
Denver office TI allowances in 2026 are at historic highs, driven by landlord competition for tenants. Class A CBD space commands $60-80/SF while suburban ranges $40-60/SF. However, actual fit-out costs often exceed allowances, particularly for high-end or creative space. Negotiate TI as part of total deal economics, consider turn-key build-outs to transfer risk and avoid depreciation constraints, and always get construction estimates before finalizing terms.
Data Sources: Cushman & Wakefield Fit-Out Cost Guide, CBRE, JROC Construction, Buildout.com, LoopNet