Why landlords are quietly recutting work-letters in Q2
Construction volatility is moving risk back into lease language, even when headline improvement allowances look unchanged.
01
The allowance is not the whole package
Landlords are holding improvement allowances steady while narrowing what qualifies, changing disbursement timing, and shortening completion windows. The number survives; the utility does not.
02
Read the mechanics
The work-letter should be modeled like a funding agreement.
- Eligible hard and soft costs
- Submission and reimbursement deadlines
- Who carries cost overruns
- Treatment of unused allowance
03
Protect the opening date
Tie critical landlord work to clear milestones and remedies. If occupancy depends on base-building delivery, a vague completion standard converts the landlord's delay into the tenant's operating problem.
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