5 Critical Office Lease Terms You Need to Get Right
By Chris Rohrer, Broker & Pete Kostroski, Broker | Rokos Advisors
Signing an office lease is one of the most impactful financial decisions your business can make—and the terms you agree to will stick with you for years. From upfront incentives to long-term cost control, it's essential to go beyond surface-level review and negotiate the details that will actually affect your bottom line.
Here are five of the most critical terms to get right:
Tenant Improvement Allowance
The TI allowance is often your biggest opportunity to reduce out-of-pocket costs and customize your space.
Negotiate for the landlord to cover the full cost of standard build-out whenever possible.
Confirm what types of improvements are eligible under the allowance.
Push for flexibility—unused TI should be convertible to rent credit or applied toward additional upgrades.
Annual Rent Escalations
A few percentage points can quietly erode your budget over time.
Know the exact percentage or method used to calculate annual rent increases.
Model out the full lease term to understand your future rental obligations.
Clarify whether increases are compounded annually or applied as flat escalations.
Operating Expenses (OpEx)
This section can hide unexpected charges if not clearly defined.
Ensure capital expenditures are excluded unless amortized per accounting standards.
Ask for a cap on controllable OpEx increases—ideally in the 3–5% range.
Request a clear breakdown of what is considered controllable vs. uncontrollable expenses.
Sublease & Assignment Rights
Flexibility is key—especially if your business plans shift.
Your lease should explicitly allow for subleasing and assignment.
Understand the landlord’s approval rights and timeline for reviewing sublease requests.
Push back on clauses that give the landlord unrestricted right to recapture or deny a sublease.
Free Rent Concessions
Strategic concessions can offer immediate savings and help with cash flow during transition.
Negotiate for free rent during the build-out or ramp-up period.
Ensure concessions apply to both base rent and operating expenses when possible.
Consider structuring rent abatement over multiple months instead of all upfront to smooth out expenses.
In the case you are negotiating a renewal you should still get what’s available in the market if you can create some leverage with alternatives.
Don’t treat your lease like a standard form document. Every clause is an opportunity to protect your business and secure favorable terms. Taking the time to get these five areas right can lead to major savings—and set you up for long-term success.
Need help navigating a lease? Rokos Advisors can guide you through it—reviewing terms, spotting risks, and negotiating on your behalf to secure the most strategic outcome.
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.