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CBRE Explains Why Non-profits Have a Higher TIA-to-Rent Ratio in the District

WASHINGTON, DC—The reason for the discrepancy is simple, Research Director Revathi Greenwood says. More importantly, the discrepancy can be a negotiating point for other tenants.

By Erika Morphy | erikamorphy | Updated on May 03, 2016

Revathi Greenwood Revathi Greenwood

WASHINGTON, DC—Washington DC has one of the highest lease concessions among all of the major US CBD markets, according to CBRE. Abatements have more than doubled since 2008, and are now approximately one free month per year of the term of the lease.  Meanwhile, tenant improvement allowances (TIAs) for private-sector leases have risen significantly since 2012 following the law firm contractions and slowdown in federal government leasing. According to CBRE, TIAs now average $74 per square feet when normalized for 10-year terms, making the average TIA-to-rent ratio 1.3x.

Now, here’s the rub: for some office users that ratio is higher and for others it is lower.

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