Set Cap on Tenant's Refurbishment Allowance

Some of your office building tenants that are only halfway through their lease terms may already be complaining that their space is looking shabby and the rent they'll be paying during the last few years of their leases will be higher than the outdated space will be worth at that point. For example, the rent at year seven of their 10-year leases won't reflect the reality of peeling paint and frayed and stained carpeting. They may already have negotiated an agreement for you to repaint and recarpet their spaces at a set future date—and pay for all or part of the work.