How much tenant improvement allowance should a dentist get?
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For a new dental lease in 2026, a reasonable target is $40 to $100 per square foot, the typical national range for medical-office TI cited by a medical real-estate brokerage, with $60–$130+ in high-cost metros (MedWest Realty). PwC's 2025 investor survey put the average for medical-office shell space at $92.50 per square foot (PwC).
Key facts
| Metric | Figure | Source |
|---|---|---|
| Medical office buildings, shell space (national) | $45–$200 per SF, avg. $92.50 | PwC Investor Survey, Q2 2025 |
| Medical office buildings, second-generation space | $5–$100 per SF, avg. $35.50 | PwC Investor Survey, Q2 2025 |
| Medical office buildings, renewals | $0–$50 per SF, avg. $17.30 | PwC Investor Survey, Q2 2025 |
| Typical medical TI, national / high-cost metros | $40–$100 / $60–$130+ per SF | MedWest Realty |
| Share of medical build-out TI usually covers | 25–60% | MedWest Realty |
| A dental lender's TI planning assumption | $25–$50 per SF | Panacea Financial |
| Dental tenant build-out cost, California | $150–$350 per SF | Dental & Medical Counsel |
Why do TI numbers vary so widely?
Three things drive most of the spread.
- Condition of the space. Shell space gets far more than second-generation space. In PwC's survey, medical-office shell averaged $92.50 per SF versus $35.50 for second-generation suites (PwC). That makes sense: the landlord funds less when plumbing and walls already exist.
- Lease term. Landlords recover TI through rent, so longer leases support bigger allowances. One brokerage says a seven- to ten-year medical lease can support $50–$100 per SF or more (MedWest Realty). Most dental leases run ten years with one or two five-year options (Curve Dental).
- Market and building class. Coastal and high-demand metros run higher (MedWest Realty).
Sources also disagree on what is "normal." A dental-focused lender's own planning guidance assumes only $25–$50 per SF (Panacea Financial), well below the brokerage and survey figures. If you budget, use the conservative number; if you negotiate, open with market data.
To turn these ranges into a number for your own project, the free build-out cost & timeline calculator (coming soon) is planned to combine square footage, operatory count and region into a budget and schedule.
To test this on your own suite before paying for drawings, the free dream-practice builder (coming soon) is planned for sketching rooms, operatory counts and layouts.
How much of my build-out will the TI actually cover?
Usually less than half. A medical brokerage estimates TI funds roughly 25–60% of total medical construction cost (MedWest Realty). Dental build-outs, at $150–$350 per SF in California (Dental & Medical Counsel), sit at the expensive end of medical space because of plumbing, vacuum and air at every chair.
A quick example for a 2,500 SF suite:
| Line | Amount |
|---|---|
| Build-out at $250 per SF | $625,000 |
| TI at $75 per SF | $187,500 |
| Your funding gap | $437,500 |
That gap is what your loan, cash or amortized TI must cover. See how dentists finance a build-out.
What does a TI allowance usually cover?
Permanent improvements that stay with the building: walls, doors, flooring, ceilings, lighting, plumbing rough-ins, electrical distribution, HVAC zoning and built-in cabinetry (MedWest Realty). It rarely covers furniture, medical equipment, IT cabling or moving costs (MedWest Realty).
Ask anyway. The same brokerage recommends negotiating to include architectural and engineering fees, permits and at least part of low-voltage infrastructure in the "TI-eligible" definition (MedWest Realty). For a dental office, data cabling is part of the building's long-term value. See how many network drops each operatory needs.
How do I negotiate a bigger allowance?
- Negotiate TI, rent and term as one package, before the LOI. Once the letter of intent is signed, the landlord has far less reason to revisit the number (MedWest Realty).
- Bring evidence. A contractor bid or a clear room-by-room program turns "we want more" into "here is what it costs to make your space a dental office" (MedWest Realty).
- Sell your credit as a tenant. Henry Schein's 2025 startup playbook quotes a consultant noting dental practices have some of the highest build-out costs, low default rates and strong foot traffic, and describes a dentist who secured over $290,000 in TI (Henry Schein Dental).
- Trade term for dollars. A longer term increases what the landlord can amortize (MedWest Realty).
- Ask for rent abatement during construction as a separate concession (Curve Dental).
- Use a dental attorney. A dental law firm calls leaving TI money on the table "extremely common and entirely avoidable" with proper representation (Dental & Medical Counsel).
What lease traps come with TI?
- Amortized TI. Extra money the landlord recovers through higher rent is effectively a loan; compare its implied rate with bank financing (MedWest Realty).
- Clawbacks. Many leases require repaying unamortized TI on early termination or default (MedWest Realty).
- Disbursement timing. Push for progress payments tied to milestones rather than one reimbursement at the end, and for unused TI to convert to rent credit (MedWest Realty).
- "As-is" delivery. Inspect HVAC, plumbing and accessibility before accepting it (MedWest Realty). See ADA requirements for dental offices.
- Restoration clauses. You may be required to remove plumbing and cabinetry at lease end unless you negotiate otherwise (Dental & Medical Counsel).
How FloorStack helps
FloorStack is a dental build-out platform that puts your budget, your lease numbers and your build team in one place. The Build-Out Cost Calculator (coming soon at /tools/build-out-cost-calculator) is planned to show your funding gap: enter square footage, shell type, market and the landlord's offer, and see what you still need to finance. Bring that number into the LOI conversation. Start at the Build a Dental Office hub and read what a dental build-out costs.
Free tools on the FloorStack dental build-out platform for this step: Dream-practice builder (free tool, coming soon).
Free tools for this step
- Build-out cost & timeline calculator (free tool, coming soon): estimate budget and schedule from your square footage, operatory count and region.
- Dream-practice builder (free tool, coming soon): sketch rooms, operatory counts and layouts on your own suite before you pay for drawings.
Frequently asked questions
What is a good TI allowance for a dental office?
In most US markets, $40–$100 per square foot is a typical medical-office range, higher in expensive metros. PwC's 2025 survey averaged $92.50 per square foot for medical-office shell space.
Do second-generation dental spaces get less TI?
Yes. PwC's survey averaged $35.50 per square foot for second-generation medical-office space versus $92.50 for shell. You need less because plumbing and walls already exist.
Will the TI allowance pay for my whole build-out?
Rarely. A medical brokerage estimates TI covers about 25–60% of total medical construction cost, and dental build-outs are among the most expensive medical spaces.
Does TI cover dental equipment or IT cabling?
Usually not equipment, furniture or moving costs. IT cabling is often excluded too, but you can negotiate to include low-voltage infrastructure and design fees.
When should I negotiate the TI allowance?
Before you sign the letter of intent, and together with rent and term. After the LOI, landlords have little reason to revisit it.
Is a longer lease worth it for more TI?
Often, if you plan to stay. Landlords recover TI through rent, so a seven- to ten-year term supports a larger allowance. Weigh it against flexibility and restoration obligations.
Sources
- PwC Investor Survey, Second Quarter 2025, Table 5: Tenant Improvement Allowances (PDF)
- MedWest Realty: Tenant Improvement Allowances for Medical Office Space, Explained
- Dental & Medical Counsel: A Dental Lawyer's Guide to Your Dental Office Build-Out (June 2026)
- Panacea Financial: 12 Tips for Starting Your Own Dental Practice (Oct 2025)
- Curve Dental: How to Start a Dental Practice, a Launch Sequence (July 2026)
- Henry Schein Dental: The 2025 Interactive Playbook to Building Your Dental Practice (PDF)
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