When the supply of space exceeds the demand, it is common for owners to provide the tenant with a period of free or perhaps reduced rent. This is commonly referred to as a(n):
A) tenant improvement allowance
B) concession
C) sublease
D) expense stop

Question

Quizplus · Accepted Answer

A concession is a common practice used by landlords to entice tenants to lease their available space when the supply of space exceeds the demand. The concession can be a period of free or reduced rent, and it is often used as an incentive to attract new or retain existing tenants. A tenant improvement allowance is a sum of money that a landlord provides to a tenant to renovate or customize the space to suit their needs. A sublease occurs when a tenant sublets all or part of their leased space to another tenant. An expense stop is a provision in a lease agreement that limits the landlord’s responsibility for certain expenses related to the property.

When the Supply of Space Exceeds the Demand, It Is