🇺🇸United States

Delayed TIA reimbursements extending time-to-cash

3 verified sources

Definition

Even when tenants are entitled to TIA reimbursements, cash is often received months after expected dates because documentation is incomplete, approvals are slow, or payment schedules were mis‑estimated, creating working capital strain. Lease accounting practitioners note that if the anticipated month for TIA cash receipt passes, reconciliations reveal mismatches and follow‑up is required to obtain payment.[5]

Key Findings

  • Financial Impact: For TIAs of $150,000 or more per lease, delays of 3–6 months in reimbursement represent a significant financing cost; the implicit cost of capital on these delayed inflows can reach tens of thousands annually for multi‑location tenants.[3][5]
  • Frequency: Monthly (every time a reimbursement milestone is reached across active projects)
  • Root Cause: Fragmented processes between construction, lease administration, and accounting cause delays in assembling invoices, lien waivers, and certificates; absence of automated reminders for reimbursement deadlines and milestone completions slows submission and landlord review.[1][5]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Leasing Non-residential Real Estate.

Affected Stakeholders

Corporate treasury, Lease accounting teams, Real estate finance, Landlords’ AP departments

Deep Analysis (Premium)

Financial Impact

$10,000–$40,000 per lease (medical/dental TIAs typically $50k–$100k; 3 month delay = $1,250–$3,333/month implicit financing; practice owner bears capital burden) • $100,000-$200,000+ annually across 20-50 locations due to staggered delays and working capital financing • $100,000–$180,000 annually for large tech expansions; on 5 concurrent TIAs averaging $200,000 each, a 3-month delay across half = $150,000 working capital impact; cost of capital at 6-7% = $7,500–$8,750 per delay cycle; with 2-3 expansion waves annually, total bleed is $50,000–$75,000

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Current Workarounds

Agency Tenant Relations Manager tracks in spreadsheet; follows up via formal written request (not email); finance team manually monitors account receivable for TIA reimbursement; delays discovered during annual budget reconciliation • AR Specialist maintains Excel receivables ledger, tracks per-lease TIA status via email chain with landlord/practice ops, monthly phone calls to follow up, manual journal entries for accruals • AR Specialist tracks TIA receivables in accounting software (QuickBooks, NetSuite), Excel aging report, manual follow-up emails to landlord/developer, quarterly reconciliation vs. lease agreements

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Forfeited tenant improvement allowance due to poor tracking

Common TIAs range from $10–$50 per square foot; for a 10,000 sq ft space this is $100,000–$500,000 of which a material share can be forfeited if deadlines or documentation are missed.[1][6][10]

Uncollected or delayed TIA reimbursements from landlords

Individual TI receivables often run into hundreds of thousands of dollars per lease; missed or long‑delayed payments can leave six‑ or seven‑figure balances outstanding across a multi‑site tenant.[3][5]

Budget overruns on tenant improvements from weak TIA expense tracking

For a TIA of $30–$50 per square foot on a 10,000 sq ft space ($300,000–$500,000), overruns of 10–20% are common in construction projects, equating to $30,000–$100,000 per build‑out.[2][6][8]

Overpaying contractors due to inadequate invoice auditing

Overbilling in construction has been documented in industry studies at several percent of project value; on TI budgets of $100,000–$500,000 this can translate to $5,000–$50,000 per project in excess payments.[8]

Rework and additional spend from non‑compliant improvements

Rework on commercial interiors frequently runs in the tens of thousands per location; for a mid‑size TI project, needing to redo 10–15% of work can cost $20,000–$75,000 plus potential loss of TIA reimbursement tied to the non‑compliant work.[1][6]

Delayed openings and lost rent or sales from TI process bottlenecks

For retail or restaurant tenants with potential sales of tens of thousands per week per location, even a 4‑week delay can mean $100,000+ in lost revenue; landlords may lose comparable rent during delayed commencements.

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