Most tenants assume renewing is just a formality: sign the same lease again, maybe swallow a rent increase, and carry on. But that kind of passive approach can cost you thousands over the next few years, not to mention lock you into space that may no longer be a good fit if you aren’t careful.
In this post I’m going to walk you through the commercial lease renewal process from the tenant’s side of the table. It’s written for business owners, not lawyers…the folks running coffee shops, yoga studios, law offices, and boutique retail stores who don’t have time to read legalese or wonder if they’re missing something important.
I’ll break down:
- What to review in your current lease
- How to prep for negotiation (even if you plan to stay)
- What kind of terms and improvements are fair to ask for
- How to avoid getting boxed in by your landlord
- And what to do if the deal they offer doesn’t work for you
The Timeline for a Smart Renewal
Most small business tenants should start the renewal process at least 9 to 18 months before the lease ends (unless the space is fairly small). That might sound early, but there’s a good reason: your landlord likely has a notice deadline baked into your lease. Miss that window, and you could lose the right to renew, or get stuck with automatic increases you didn’t agree to.
Even if there’s no official deadline, starting early gives you breathing room to compare against similar locations, or prepare to negotiate other terms.
Review Your Current Lease Terms…Closely
Before you even think about what you want, you need to know what you’re already locked into. Most commercial leases are full of clauses that only matter when it’s too late, like when you realize your “renewal option” expired last week, or that rent will spike 15% if you don’t act soon.
Start by pulling up your lease and zeroing in on these areas:
Do you have an option to renew? If so, how far in advance must you notify the landlord? Is the rent pre-determined (e.g., tied to CPI or a fixed bump), or does it say “market rate”? If it’s market rate, you may still be able to negotiate, but the landlord has more room to dictate terms.
Some leases automatically raise the rent each year or at renewal, while others give room to renegotiate. Look for language around “base rent increases,” “CPI adjustments,” or “step-up clauses.”
If you stay past your lease expiration without renewing, your rent could jump significantly — sometimes 150% of the last rent. These penalties are meant to discourage delay and put pressure on tenants.
If the lease says you must give notice of renewal in writing 180 days before lease end, and you’re at Day 179? You’re out of luck. Watch for wording like “notice shall be given in writing by certified mail.”
If your business might expand, check for these clauses. They give you first dibs on nearby spaces if another tenant expresses interest or if your landlord is selling. If they’re not in your lease, a renewal is your chance to ask for them.
Keep in mind, even if you have a renewal option, you’re not stuck with its terms. Many tenants negotiate better deals by declining the option and instead proposing a new agreement altogether, especially if market rents are soft or the space needs upgrades.
Decide What You Need Going Forward
Renewing a lease isn’t just about rent, it’s about whether the space still works for your business.
Maybe things were different three years ago. You might’ve had fewer employees, lower foot traffic, or a simpler operation. But if your business has evolved, then your space needs probably have too.
Take this time to reassess everything. Not just the size, but the layout, visibility, access, and overall function. Is the space supporting your growth, or holding it back? A small team that used to thrive in 1,000 square feet might now be crammed into corners and converted storage rooms. On the flip side, if your sales are increasingly online or your staffing is hybrid, you could be overpaying for square footage you barely use.
This is also when you can think bigger (or leaner). Could you negotiate for a smaller suite down the hall? Or secure first rights on an adjacent space for future expansion? Maybe the space works well, but the finishes, lighting, or infrastructure are dated. A lease renewal is often your only shot to get the landlord to fund improvements or reconfigure the layout. New tenants get those benefits all the time. Long-term ones rarely ask. That’s a mistake.
The key is to treat this renewal like a fresh start. Don’t assume your current footprint is your only option. And don’t wait until the landlord sends over paperwork to realize you could’ve asked for more.
Negotiate Like You’re a New Tenant
If you’re staying in the space, your landlord is saving money. They avoid downtime, build-out costs, and broker fees. That means you have leverage. But if you treat the renewal like a formality, you give that leverage away.
Don’t just ask, “What’s the new rent?” Ask what else is on the table.
Are they willing to refresh the carpet or repaint? Cover part of the HVAC upgrade you’ve been patching together for two years? Reduce or eliminate rent escalations? Offer a longer term with predictable rates? These aren’t overreaches, they’re standard concessions landlords offer new tenants every day. You just have to ask for them. Here are some additional examples:
| Concession Type | Example Requests | When to Push For It |
|---|---|---|
| Rent Discounts | 1–3 months free rent, reduced base rent | If landlord is trying to fill vacancies |
| Tenant Improvements | New flooring, paint, lighting upgrades | When space is outdated or worn |
| Reduced Escalations | Cap on annual increases (e.g., 3% max) | If market rent is flat or declining |
| Term Flexibility | Shorter term, early termination clause, renewal option | If you’re unsure about future needs |
| Operating Expense Caps | Limit on CAM or tax increases | In full-service or NNN leases |
| Parking or Storage | Extra spots, discounted rates, secure storage use | If nearby competitors offer them |
I would also suggest to look at it from your landlord’s perspective. Primarily what it would cost your landlord to replace you.
- How many months would the space sit empty?
- What’s the cost of tenant improvements for a new tenant?
- How much will they pay in broker commissions?
Even a conservative estimate adds up fast. That gives you a dollar amount to work with and a reason to ask for a slice of that savings.
Use it. Put it in writing. Build your case like you’re negotiating from scratch, because you are. The difference is, this time, you’re walking in with a payment history and a track record. That’s something a new tenant can’t offer.
Know What the Market Says You’re Worth
If you walk into a renewal without knowing what other spaces are leasing for, you’re negotiating blind.
Most landlords will frame their offer around what they think you’re willing to accept-not what the market would actually bear. That’s why one of the most valuable steps you can take is to find comparable listings nearby. Same square footage, similar building type, same side of town. See what’s available and what those landlords are offering new tenants to sign on.
And don’t just look at rent. Pay attention to incentives. Is another space offering three months free? Will they give generous TI allowances or throw in free parking? Your current landlord may not offer any of that unless they know you have options. If you show that you’ve done your homework (and maybe even mention a few of those alternatives by name) the tone of the negotiation changes completely.
This is also where bringing in a tenant broker pays off. You don’t have to hire one, but a broker can pull comps, get you actual landlord concessions data, and make sure you’re not paying above-market just because you didn’t check.
The takeaway here is simple: walk in with numbers, not assumptions. Market data is leverage. Without it, you’re negotiating against yourself.
Use the Landlord’s Savings as Leverage
Your landlord doesn’t want to replace you. Vacancy hurts. No matter how you cut it, they will almost certainly lose revenue. When you renew, they avoid all of that.
This isn’t about being adversarial. It’s about being informed. If you’ve paid rent on time, maintained the space, and avoided conflict, you’re what every landlord wants: a reliable tenant.
Some tenants run the numbers themselves. What would it cost your landlord to replace you? Maybe $10,000 in downtime, $15,000 in build-out, $7,000 in commissions. That’s $30,000 they get to keep by retaining you. It’s reasonable to ask for even a third of that in improvements, reduced increases, or flexible terms.
Frame it like this: “I know staying saves you money. I’d like to talk about how we can make the next lease work well for both of us.” Not every landlord will say yes. But the ones who understand your value won’t be surprised you brought it up.
Don’t Act Like You’re Stuck
If your landlord thinks you’re staying no matter what, expect a weak offer.
They won’t give you free rent, upgrades, or flexibility unless they believe you’re willing to walk. That doesn’t mean bluffing, it means doing your homework and showing you have options. You don’t need to threaten to leave. Just say: “We’re looking at a few alternatives, but we’d prefer to stay if the terms make sense.”
That simple statement keeps pressure where it belongs-on your landlord to compete. Tenants who explore other options almost always get better renewal offers than those who don’t.
What to Do if the Landlord Won’t Budge
Sometimes, the landlord just digs in. Maybe they’re demanding a steep rent increase. Maybe they’re ignoring your requests for improvements or won’t commit to anything in writing. It happens, but you still have options.
Here’s how to handle it:
- Stay calm, but stand firm. Don’t let the pressure rush you into a bad deal. If the renewal terms don’t make sense, you’re allowed to walk.
- Start getting quotes from other properties. Even if you’d rather stay, having real numbers in hand changes the conversation, fast.
- Bring in a tenant broker. They cost you nothing in most cases, and they know how to push back without escalating conflict.
- Call a real estate attorney. If the issue is legal, like a personal guaranty or one-sided renewal language, a lease review can fix it or shut it down.
If your landlord is betting you won’t leave, make sure you’re ready if you need to. The cost of inaction usually hits your bottom line, not theirs.
Lease Protections Worth Negotiating at Renewal
Most commercial tenants don’t think of a lease renewal as a chance to strengthen their legal footing, but it is. If your original lease was signed when you were just starting out, it probably favors the landlord more than it should.
These are some of the most overlooked terms you can add or renegotiate during the renewal process:
Want flexibility to grow? Ask for the first shot at nearby space if it becomes available. A Right of First Refusal (ROFR) lets you match another tenant’s offer. A Right of First Offer (ROFO) gives you dibs before the landlord markets the space. Either one gives you expansion options without a full commitment today.
Plenty of leases include force majeure clauses, yet most only protect the landlord. During renewal, you can ask for that language to be mutual, so you’re not liable for rent during things like natural disasters or government shutdowns. This became a real issue during COVID and still gets missed.
If your original lease included a personal guaranty, now’s the time to renegotiate it. Many landlords will agree to remove or reduce guarantees once your business has a proven history. Ask for a clause that phases it out after 12-18 months of on-time rent.
If you’re unsure about your business’s long-term space needs, consider requesting an early termination option. This might include a fixed notice period and a buyout fee. It’s not standard, but some landlords will agree, especially if they think they can re-lease the space quickly.
In full-service or triple net leases, uncontrolled operating expenses can become a financial drain. You can negotiate a cap on year-over-year increases, say, no more than 3-5%. This makes your future costs more predictable and protects you from spikes you didn’t budget for.
Business models change. If you want to sell or scale down, having the right to sublease or assign your space is key. Some leases allow this only with landlord consent. Push for language that says consent won’t be “unreasonably withheld.”
Each of these terms can give you more flexibility, more control, or a stronger legal position. None of them are guaranteed, of course, but most landlords won’t offer them unless you ask.
Don’t Just Renew – Negotiate
A lease renewal is one of the most overlooked moments to improve your space, your terms, and your long-term business position. Most tenants treat it like a simple yes-or-no question. But the smart ones know it’s a second chance to get things right.
Start early. Know your market. Understand your value to the landlord. And treat the renewal like what it really is: a new lease with built-in advantages, if you use them.
