Landlords pay for Cheesecake Factory's lavish restaurant finishes

Despite widespread coverage of The Cheesecake Factory's lavish buildout costs, the reporting never mentions that landlords—not the brand—are the ones footing the upfront bill.

Landlords typically pay between $100 and $250+ per square foot in tenant improvement (TI) allowances—and often significantly more in total capital outlay—to build out a Cheesecake Factory.

Because a standard Cheesecake Factory footprint spans roughly 7,500 to 10,000 square feet, this amounts to aggregate landlord contributions ranging from $1.0 million to $3.5+ million per lease, depending on deal structure, site condition and landlord leverage.

While the TI allowance rarely covers the entire construction budget, landlords provide substantial capital because Cheesecake Factory serves as a premier traffic driver and generates enormous rent for Class-A malls, lifestyle centers and mixed-use developments.

Read more: The Cheesecake Factory Is Over-the-Top, Gaudy and Bizarre. (The Wall Street Journal)