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The video tutorial discusses incentives and initial direct costs in a lease agreement. Incentives are anything that encourage the lessee to sign the lease and involve a change in cash flow from the lessor to the lessee or a third party. Common incentives include a tenant improvement allowance or paying for moving expenses. Rent abatement or free rent period are not considered incentives. Initial direct costs are incremental costs of the lease that would not have been incurred without the lease, such as broker commissions.
