You paid for the switchgear. Your landlord keeps it, and new gear costs 89% more.

On a 250,000 SF IE West distribution building, a tenant that paid $750,000 in January 2020 for an added electrical service and distribution would pay about $1,154,078 to replace it today. That is $4.62/SF, or 4.5 months of rent at Lee's Q3 2026 IE West average of $1.034/SF/mo, and more than the four months free that is the median on Lee's 100,000 SF+ renewals. Recovered over a five-year term it is $230,816 a year, $0.92/SF/yr. The equipment alone is up 89.8% since January 2020 on the federal switchgear price index.

Your lease hands that asset to the landlord. The AIR single-tenant net lease classes power panels and electrical distribution as Utility Installations rather than Trade Fixtures, and at expiration the landlord either keeps them or orders them out. The landlord makes that call, not you, and neither your renewal rent nor your relocation math gives you credit for what you leave behind.

The mechanism sits in two paragraphs of the AIR form. ¶7.1(a), Lessee's Responsibility, defines Utility Installations to include power panels and electrical distribution, separate from Trade Fixtures, which are your machinery and equipment removable without material damage. ¶7.4(a), Ownership, makes your Alterations and Utility Installations yours during the term but lets the landlord elect in writing to own any of them, and unless removal is required they become the landlord's at expiration and are surrendered with the Premises. ¶7.4(b), Removal, lets the landlord require removal by written notice shortly before the end of term, and ¶7.4(c), Surrender/Restoration, puts the repair of removal damage on you. The landlord holds both options. You hold neither.

The fallback brokers rely on does not reach this gear. Civil Code §1019 lets a tenant remove “anything affixed thereto for purposes of trade, manufacture, ornament, or domestic use, if the removal can be effected without injury to the premises,” but not if the thing has “become an integral part of the premises.” A main switchboard wired into the building service is the integral part. Fixtures left behind once the landlord regains possession are the landlord's.

Every competent IE broker negotiates removal and restoration. A restoration waiver protects you from a cost. It does nothing about the asset you leave behind, and three things changed that asset after most current leases were signed. The BLS switchgear producer price index went from 217.2 in January 2020 to 412.235 in September 2026, up 89.8%; the transformer index rose 91.4% from January 2020 to July 2026. Since April 6, 2026, Section 232 duties under Proclamation 11021 apply to the full customs value of the import, and the typical pad-mount distribution transformer (HTS 8504.22, 650 to 10,000 kVA) sits on Annex I-B, re-issued in June under Proclamation 11032, at 25%. The 15% temporary list, Annex III, covers only liquid-filled transformers above 10,000 kVA and dry-type units above 500 kVA, and no switchgear. Wood Mackenzie's Q2 2025 survey put switchgear lead times near 44 weeks and power transformers near 128.

That cuts both ways at a lease event. Relocate, and you lose the gear and rebuy it at 2026 prices on a lead time longer than the 9 to 12 months a relocation usually allows, which hands the landlord leverage when you negotiate the renewal instead. Renew on a plain fair-market option, and the appraiser values a power-ready building, power-ready because of gear you bought. The tariff bites hardest if you take primary service and own your transformer; in SCE territory at secondary voltage the transformer is often SCE's. The utility-side work you paid SCE for under Rule 15 was SCE's from day one, refunds run ten years, and under E.8 “Any unrefunded amount remaining at the end of the ten-year period shall become property of SCE.” Leave early and you stop generating the revenue that earns the refund.

Size the illustration to your own scope. A plain 2,000-amp-plus industrial service upgrade runs $100,000 to $200,000+, per Anaheim contractor Delta Wye Electric; the $750,000 case is a heavy-power fit-out for automation, cold storage or fleet charging. At $300,000 installed in 2020, replacement is $461,631, $0.37/SF/yr over five years. At $1.5 million it is $2,308,156, $1.85/SF/yr. The 89.8% applies to the equipment. With installation labor held flat, the all-in replacement cost is up 53.9%.