Tenant Assets: The Overlooked Backbone of Commercial Real Estate

Tenant assets, including leasehold improvements and personal property, are a critical component of commercial real estate. With the average cost of tenant improvements ranging from $30 to $100 per square foot, depending on the location and type of property, the stakes are high for both landlords and tenants. The controversy surrounding who owns and maintains these assets is a longstanding point of contention, with 75% of commercial leases failing to clearly define tenant asset ownership. As the commercial real estate market continues to evolve, with players like WeWork and Amazon redefining the concept of tenant space, the importance of understanding tenant assets will only continue to grow. According to a report by CBRE, the global commercial real estate market is projected to reach $4.2 trillion by 2025, with tenant assets playing a crucial role in this growth. The influence of key players, such as the Building Owners and Managers Association (BOMA) and the National Association of Realtors (NAR), will be instrumental in shaping the future of tenant assets.