Are TIs and rent abatement a scam?

Are Free Rent and TIs a Scam?

When I studied abroad in Florence, one of the very first things our professoressa told us about Italy was that "niente è libero" - nothing is free. (She also taught us that bottled water is more expensive than wine, and to always carry proper bus fare.)

All these years later, I still remember it, and I feel my "niente è libero" spidey senses tingling when I see an offer that seems too good to be true.?

Like a free drink from a handsome stranger at the discoteca. Like a pair of very real looking Ferragamos selling for a fraction of MSRP.?Like when a retail landlord offers TI ($$ towards your buildout) or free rent at the start of your lease.

Are landlords being predatory by offering these concessions? And, are retailers being naive to accept them? It seems too easy...like there has to be a catch. So, is there??

The short answer is no - leasing concessions are generally not predatory, nor are they necessarily too good to be true.

Here's how it works - landlords are able to offer concessions (some in the form of cash up front to pay for your buildout, others in the form of "free" or abated/deferred rent) because you're promising them something more valuable in return -- your lease.

So,?while you don't need to worry that concessions from landlords are predatory,?you should understand exactly what your landlord is expecting from you in return. And if it's not clear to you? The guidance of a trusted broker can be invaluable.

At the end of the day, the?"niente è libero" is still true -- you're going to pay the landlord back for these upfront concessions in the form of your monthly rent over the term of your lease. But, as long as you understand your role in the exchange, you're not being scammed.?