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Don&#8217;t get screwed.</text><text x="58" y="258" font-family="Arial,Helvetica,sans-serif" font-size="30" font-weight="600" fill="#6b5b4d">Leases, TI, NNN &amp; buildouts — negotiated in your favor</text><g transform="translate(1010,86)" fill="none" stroke="#C0531F" stroke-width="9" stroke-linejoin="round"><rect x="20" y="40" width="150" height="130"/><line x1="20" y1="40" x2="95" y2="6"/><line x1="170" y1="40" x2="95" y2="6"/><rect x="50" y="80" width="36" height="36"/><rect x="104" y="80" width="36" height="36"/><rect x="74" y="128" width="42" height="42"/></g></svg>

How Do I Get Key Money or a Reverse Premium From a Landlord?

Direct Answer

Key money flowing *to the tenant* — a reverse premium — is real, and you get it by being the tenant a desperate landlord will pay to land. The move only works when the leverage is yours: high vacancy, a brand or anchor that lifts the whole property, or a landlord facing a loan covenant or refinancing deadline that forces them to fill space fast.

In those conditions a landlord will hand you a lump-sum cash inducement — often $10–$50+ per square foot on top of a normal TI allowance — to sign. On 10,000 sq ft at $30/sq ft, that is a $300,000 check wired at lease commencement. The biggest money move is framing your value in *their* terms: a strong-credit or marquee tenant raises the building's net operating income, occupancy, and appraised value, which can be worth far more to the landlord than the cash they pay you.

Stack the reverse premium with a fat TI allowance ($50–$100/sq ft), 6–12 months free rent, and a moving-cost or lease-takeover payment that covers the rent left on your old space. Do not call it "key money" in the U.S. — call it a tenant inducement, cash contribution, or signing allowance, and get it paid at commencement, not amortized, with no clawback if you stay the full term.

The tenant who asks gets paid to move in; the tenant who assumes the landlord holds all the cards leaves a six-figure check on the table.

What A Reverse Premium Actually Is

"Key money" traditionally meant a payment from an *incoming tenant to a departing tenant or landlord* to acquire a desirable space — common in prime retail and in markets like the UK and Asia. A reverse premium flips it: the landlord pays *you* to take the space. The forms it takes:

• Cash inducement (signing allowance). A lump sum wired at lease commencement, separate from TI.
• Lease-takeover or buyout payment. The new landlord covers the rent and obligations left on your *old* lease so you can move without double rent — often $50,000–$500,000 depending on time remaining.
• Oversized TI plus free rent. Effectively a reverse premium delivered as construction dollars and rent abatement rather than cash.
• Fixturing or moving allowance. A check to cover relocation, IT, signage, and downtime.

The principle: a reverse premium is the landlord buying your occupancy because your presence is worth more to the asset than the cash costs them. Your job is to prove that math.

When You Have The Leverage To Get It

A landlord pays a reverse premium only when *not* having you costs them more than paying you. Look for these conditions before you ask:

• High or rising vacancy. A building at 70% occupancy in a soft submarket is bleeding NOI. Filling 15,000 sq ft can be worth a hefty inducement.
• A refinancing or covenant deadline. Landlords with a loan maturing or a debt-service-coverage covenant need signed leases to refinance or avoid default. A deadline is your single best lever.
• You are an anchor or a draw. A recognized brand, a heavy-traffic retailer, or a credit tenant lifts the whole property's leasing power. Landlords pay to land "the name."
• Strong credit and long term. An investment-grade tenant on a 10–15 year lease is a bondable income stream that raises the building's value at a low cap rate.
• A landlord competing for you. When two buildings want you, the inducement is how they break the tie. Run a real competition.

If none of these apply, push for TI and free rent instead — a cash reverse premium is a *leverage* product, not a default ask.

How To Ask And Structure It

Frame the request as economics, not a favor, and lock the terms so the cash actually lands.

• Lead with the landlord's number, not yours. Show how your occupancy lifts NOI: filling 10,000 sq ft at $30/sq ft adds $300,000 of annual rent, which at a 6.5% cap is roughly $4.6 million of building value. A $300,000 inducement to capture that is a bargain — say it that way.
• Name the form you want. Ask explicitly for a cash signing allowance, a lease-takeover payment for your old space, an oversized TI allowance, and free rent — stacked, not traded against each other.
• Get cash at commencement, not amortized. Amortized inducements just become higher rent. Demand the lump sum paid on lease signing or build completion.
• Kill the clawback — or cap it. Landlords may want repayment if you default early. Limit any clawback to a straight-line burn-down so it disappears as you perform.
• Document the trigger and timing in the lease. Specify the dollar amount, the payment date, and the conditions, so it is enforceable, not a promise.
• Use a tenant rep broker. A broker who knows which landlords are under refinancing pressure is how you find the desperate ones — and their fee is paid by the landlord.

How Not To Get Screwed On The Deal

A reverse premium can come wrapped in terms that quietly take the money back. Watch for these:

• The amortization trick. A landlord "gives" you $40/sq ft then bakes it into the rent at 8% interest over the term — you are financing your own inducement. Insist on a true upfront payment.
• The above-market rent offset. Big inducements often hide a rent rate above market. Always compute net effective rent (total rent minus all inducements over the term) to see the real deal. A $300,000 check on a rate that is $3/sq ft over market on 10,000 sq ft loses you money by year three.
• The aggressive clawback. A full-repayment-on-any-default clause turns the inducement into a hostage. Limit it to your fault, cap it, and burn it down.
• The CAM and tax recapture. Some landlords recover the inducement through inflated operating-expense pass-throughs. Cap CAM and keep an audit right.
• The funding contingency. If payment is tied to the landlord's refinancing closing, you may never see it. Tie payment to *your* milestones (signing, commencement), not the landlord's financing.

A Quick Playbook

1. Confirm you have real leverage — vacancy, anchor pull, credit, or a landlord deadline.
2. Quantify your value in the landlord's terms — NOI, occupancy, and appraisal lift.
3. Ask for a stacked package — cash inducement + TI + free rent + moving/takeover money.
4. Always compute net effective rent so an above-market rate cannot hide the giveback.
5. Get it upfront, clawback-capped, and tied to your milestones — in writing in the lease.

FAQ

Is "key money" legal and common in the U.S.? A landlord paying a tenant to sign — a reverse premium or tenant inducement — is entirely legal and common in the U.S., though it is usually called a cash contribution, signing allowance, or lease-takeover payment rather than "key money." The traditional key-money concept (an incoming tenant paying for a coveted space) is more associated with prime retail and overseas markets.

In soft U.S. Markets, landlords routinely pay inducements; you just have to have the leverage and ask for it explicitly.

How much reverse premium can I realistically get? It scales with your leverage and the landlord's pain. In a soft market with a credit tenant, cash inducements of $10–$50+ per square foot on top of a normal TI allowance are achievable — on 10,000 sq ft that is $100,000–$500,000+.

Add an oversized TI ($50–$100/sq ft), 6–12 months free rent, and a lease-takeover payment for your old space. The number is largest when a landlord faces a refinancing deadline or needs your name to lift the building.

Won't the landlord just bake the inducement into higher rent? That is the most common trap, so guard against it. A landlord may "give" you cash or TI and recover it through an above-market rent or by amortizing the inducement at interest. Always calculate net effective rent — total rent over the term minus every inducement — to see whether the deal is actually good.

Demand the inducement paid upfront, not amortized, and benchmark your base rate against true market comps before you celebrate the check.

What triggers a landlord to pay a reverse premium? Pressure. The strongest triggers are high vacancy dragging down NOI, a loan maturity or debt-covenant deadline that forces the landlord to sign leases fast, and a marquee or credit tenant whose presence raises the whole building's leasing power and appraised value.

When a landlord is competing against another building for you, the inducement is how they win. If none of those exist, redirect your ask to TI and free rent, which landlords give more freely than cash.

Sources

• CBRE — Occupier advisory on tenant inducements, net effective rent, and concession benchmarking.
• JLL — Tenant Representation guidance on signing allowances and lease-takeover negotiation.
• Cushman & Wakefield — Capital Markets and leasing advisory on landlord refinancing pressure.
• NAIOP (Commercial Real Estate Development Association) — Concession and net-lease economics research.
• BOMA International — Operating-expense pass-through and CAM-recapture standards.
• IREM (Institute of Real Estate Management) — Leasing incentive and tenant-relations best practices.
• Tenant-rep brokerage practice guides — Reverse-premium structuring, clawback, and net-effective-rent analysis.