How to Get the Best Lease Renewal Terms from Your Landlord

When it comes time to renew your commercial lease, simply accepting your landlord’s initial offer can mean missing out on significantly better terms. Evaluating your options, creating a competition and negotiating strategically can ensure you’re getting the best possible deal.

Here are five essential steps to help you secure favorable renewal terms:

1. Be Aware of Your Renewal Rights

   Check your current lease to make sure that you have a clear understanding of your renewal rights. Renewal rights are not difficult to negotiate and are a key tool in getting the best possible lease renewal. This language will have both an indication of how rates and other terms would be decided as well as a timeline for you to follow to keep the renewal right. There is typically a requirement that give you notice of your renewal intentions 9-12 months prior to your lease end. If you miss that date, you lose that option. So, check your current lease as a first step.

2. Request a Thorough Proposal from Your Landlord

   Before making any decisions, ask your landlord for a detailed renewal proposal. This should include rental rates, lease duration, cash allowance for alterations and updates, maintenance responsibilities, and any other proposed changes. Getting this information upfront provides a clear picture of what staying in your current space would look like financially and contractually. Keep in mind that you can negotiate anything related to this lease. Including an entirely new lease document if the current one is unfavorable to you.

3. Explore Other Leasing Options

   Even if you prefer to stay at your current location, researching alternative properties can provide leverage in negotiations. To do this effectively:

   1. Request tours and proposals from comparable buildings.

   2. Use public platforms like LoopNet to identify available spaces.

   3. Work with a commercial real estate professional who has access to CoStar and off-market spaces for deeper market insights.

4. Space Plan and Estimate Costs

   Once you have renewal and alternative lease options, evaluate how much each space layout aligns with your business needs. Consider:

   1. How efficient is the space?

   2. Are modifications or upgrades necessary?

   3. Most building owners (including your current one) will pay for a new space plan to be done for you at their cost.

   4. Requesting a general contractor’s cost estimate for any potential buildouts to understand the true financial impact of each choice.

5. Negotiate Aggressively

   Don’t hesitate to ask for everything you want during negotiations — your landlord may be more flexible than you expect. Key areas to negotiate include

   1. Rental rate reductions or caps on annual increases.

   2. Tenant improvement allowances.

   3. Free rent periods or other incentives.

   4. parking accommodations and other amenities.

   5. Changes to the lease that give you a renewal.

By following these steps, you’ll be in a strong position to secure the best possible lease renewal terms. Evaluating market alternatives, understanding real costs, and negotiating strategically can help you achieve savings and flexibility that benefit your business in the long-term.

Are you considering renewing your current lease? Contact Rokos Advisors today to ensure you get the best possible terms.

Rokos Advisors is an award-winning Minneapolis - St. Paul based commercial real estate/tenant representation firm specializing in helping businesses find the perfect office or industrial space for their company.