The TI Allowance Is Getting Harder to Win in DFW Industrial. Here's How to Still Get It

CBRE's Q3 2026 numbers put DFW industrial vacancy at 7.8%, down from 8.2% last quarter and 8.9% a year ago. Leasing volume hit 23.5 million square feet, the strongest quarter in three years. Landlords read those numbers the same way you do, and the first place it shows up in a proposal is the tenant improvement allowance.

A year ago, plenty of owners would throw real money at a second-generation space just to get a signature on a lease. Now the same building comes back with half that, or a flat "as-is" offer with a free-rent month as a consolation prize. Some of that is real market tightening. Some of it is just an opening bid. Telling the two apart is most of the job, and it starts with understanding how landlords actually think about this number.

A TI allowance isn't free money. It's rent you pay later, amortized into the lease whether the landlord says so explicitly or not. Landlords underwrite it as capital they're fronting against the length and strength of your lease term, which is why the sequence of your negotiation matters more than most tenants realize. Walk in asking for a TI number before you've settled on term and you're negotiating with one hand tied behind your back, because term is what tells the landlord how much risk they're carrying and over what horizon. Get base rent and term roughly agreed first. Once a landlord is mentally committed to the deal, TI becomes a conversation about structuring the buildout rather than justifying whether it happens at all. Stretch your term from five years to seven or eight and don't be surprised to see the allowance move up meaningfully in response, that's close to a universal pattern even if it's not a hard rule everywhere.

Credit matters here too, more than most tenants expect. A landlord evaluating a TI request is really asking one question: if I spend this money improving your space, how likely am I to collect the rent that pays it back? A tenant with strong financials or a longer operating history is a much easier yes on a bigger allowance than a thin company asking for the same dollar figure. If your balance sheet is a weak point, lead with whatever strengthens the credit picture, a guarantee, a larger security deposit, a longer commitment, rather than leading with the improvement wish list.

Once you're inside the actual numbers, ask how the allowance was priced and what happens to any unamortized balance if you leave early. A bigger allowance on a short term usually means a higher rate or a repayment clause buried in the lease, and you want to know that before you celebrate the headline figure. There's also a real trade worth understanding: TI dollars and free rent often come off the same lever. A landlord who won't move on the allowance may have more room on abated rent up front, and vice versa. If your buildout needs are modest but year-one cash flow is tight, extra free months can be worth more than TI you won't fully use. If you're walking into raw shell space that needs real work, the calculus flips.

The lever you actually have in this market is term. Landlords are sitting on nearly 34 million square feet of new product under construction across the metro and still want long, credit-worthy tenants locked into their existing buildings, because every delivery is a competitor for the next prospect. If you can live with a longer commitment, spend that leverage deliberately, on allowance, on a rent bump schedule that starts lower, or on a renewal option fixed to a percentage of market instead of pure fair market value. Don't give the extra term away for nothing.

Two more things people miss. First, push to get the allowance usable on more than cosmetic buildout, HVAC replacement, dock levelers, an LED retrofit, and paving repairs are fair game if you negotiate the language, and in an older building those are often the real money items. Second, get the disbursement mechanics in writing. An allowance paid only after you've already funded the work, with a thirty-day review clause on top, is effectively a loan you're making to your landlord, and if your cash position is tight you want a partial advance tied to an earlier milestone instead.

The tenants who get hurt in this market treat the first proposal as the market. It isn't. Pull comps, know which buildings have been sitting on stale vacancy, and let those owners know you're looking elsewhere too. A building empty for a year will move on TI faster than one with three tours scheduled this week. If you're within eighteen months of a decision, start the conversation now, while you still have room to be choosy.