Real Estate Should Be An Annual Review, Not a Once Every 5–10 Years Decision
CEO Series | Week 4 of 7
By Chris Rohrer & Pete Kostroski | Co-Owners
Ask most CEOs when they last thought seriously about their real estate, and the answer is usually “when we signed the lease.” Maybe there’s a vague plan to revisit it a year or two before it expires. In the meantime, it sits in the background, a fixed cost, a known address, a solved problem.
It’s one of the more expensive assumptions a leadership team can make.
Real estate markets don’t pause while you’re focused on running your business. Rates move. New buildings come online. Landlords who were immovable two years ago are suddenly flexible. Competitors are locking in better terms. And the lease you signed, which felt right at the time, may now be misaligned with how your company actually operates.
None of that is visible if you’re not looking.
Waiting until expiration is the most expensive default
The instinct to wait makes sense on the surface. You’re busy. The lease isn’t expiring for years. Nothing feels urgent. But urgency and importance aren’t the same thing, and real estate is a category where that distinction costs real money.
Companies that engage with their real estate only at expiration show up to the negotiating table with no leverage and no time. They’re reacting to a deadline instead of acting on a strategy. Landlords know this, and they negotiate accordingly.
The companies that consistently get better outcomes better rates, better terms, more flexibility, are the ones that stay engaged between transactions. Not obsessively. Not expensively. Just intentionally.
What an annual review actually looks like
This doesn’t need to be a major undertaking. Once a year, the right questions are worth 60 minutes of leadership’s time:
How does our current rate compare to what’s available in the market today? Are we using our space the way we planned when we signed? Do we have expansion rights, renewal options, or other embedded terms we haven’t thought about recently? Are there expirations across our portfolio coming up in the next two to three years that should be on our radar now?
Most leadership teams that actually go through this exercise find at least one thing worth acting on, like a market shift that creates leverage, an option that’s about to expire unused, a space utilization mismatch that’s quietly draining productivity. The opportunity is almost always there. It just requires someone to look for it.
Mistakes are fixable if you catch them early enough
One of the more useful mindset shifts for leadership teams is understanding that real estate mistakes are rarely permanent. A lease that no longer fits the business isn’t a sentence, it’s a starting point for a conversation. Subletting, restructuring, early renewal, buyouts, there’s a real toolkit available, but it works best when you have time on your side.
The same is true for opportunities. A favorable market window, a landlord looking to fill space, a building that just added amenities your team would value are things that don’t announce themselves. They reward the leadership teams that are paying attention.
Real estate is a long-cycle asset that responds well to short-cycle attention. Treat it like any other strategic lever, something worth reviewing regularly, not just when the contract forces the conversation.
When did your leadership team last look at your real estate with fresh eyes? If the answer is “when we signed,” it might be worth an hour on the calendar.
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.