What does "tenant improvements" refer to?

The term "tenant improvements" refers specifically to modifications or renovations made by or for a tenant to tailor the leased space to their specific operational needs. This can include alterations like installing partitions, upgrading fixtures, or making changes to layouts to better suit the tenant’s business activities. These improvements are typically designed to enhance the functionality and aesthetics of the space in a way that aligns with the tenant's requirements.

This focus on tenant-specific alterations distinguishes it from other types of improvements, such as those made to common areas of a property, which benefit all tenants and are generally the landlord's responsibility. While landlord-financed renovations and improvements that may impact property taxes are relevant to the overall management and valuation of a property, they do not fall under the definition of tenant improvements, which is fundamentally about customization for individual tenants.