Renew or Regret? The Hidden Costs Behind Lease Renewals
By Chris Rohrer, Broker | Rokos Advisors
When your lease is coming up for renewal, sticking around can feel like the easy — and cheapest — choice. No moving trucks, no construction dust, no disruption to your team.
But here’s the reality check: renewing your lease isn’t automatically the budget-friendly move many business owners think it is. In fact, in today’s market, staying put can sometimes cost you more than relocating. Let’s dig into why.
Landlords Aren’t Handing Out the Same Deals
During a new lease negotiation, landlords often roll out the red carpet:
Free rent periods
Generous tenant improvement (TI) allowances
Competitive rental rates
But on a renewal? Not always. Many landlords assume you won’t want the hassle of moving — and they price accordingly. The result is fewer concessions and higher effective rents than a brand-new tenant might secure.
Market Shifts Could Mean Better Deals Elsewhere
The commercial real estate market has been shifting fast. Hybrid work, higher vacancies, and financing challenges have landlords fighting harder for new tenants in many areas. That means deals are getting sweeter for businesses willing to consider a move.
If you signed your lease five or ten years ago, there’s a decent chance market rents have adjusted — sometimes downward. Exploring options outside your current building could reveal significant savings you’d miss if you automatically renew.
Hidden Costs Lurking in Older Spaces
Even if your rent stays relatively flat, older spaces can quietly drain your budget. Aging mechanical systems often lead to costly repairs. Deferred maintenance can become your problem under triple-net leases. Compliance upgrades for fire codes, accessibility, or energy standards might also become expenses your landlord tries to pass along.
Staying in an outdated space could mean pouring cash into repairs or retrofits you hadn’t planned for.
Your Business Has Changed — Has Your Space?
Businesses evolve — your team size, how you work, and how you engage with customers. Does your current layout still support how your business functions today?
Renewing without rethinking your footprint can mean overpaying for square footage you don’t use, or missing opportunities to improve efficiency, culture, or the customer experience.
Negotiating Power Comes from Having Options
Here’s the big takeaway: exploring your options doesn’t mean you have to move.
Even if you prefer to stay, benchmarking other properties can give you critical leverage in your renewal negotiation. Landlords are far more likely to sharpen their pencil when they know you’re considering alternatives.
How to Avoid Overpaying on Your Renewal
Before you sign that renewal offer, start early — ideally twelve to eighteen months in advance — so you have time to explore your options. Benchmark other spaces to see what incentives, rates, and concessions are available elsewhere. Consider requesting a market check clause that ties renewal rates to current market conditions instead of automatic increases. Evaluate whether your current layout and square footage still fit your business. And bring in a trusted advisor who can help uncover savings and negotiate terms you might not even know are on the table.
Renewing your lease can be the right move — but only if it’s the smartest financial decision for your business today, not just the easiest one.
Don’t pay a premium for convenience. Explore your options, arm yourself with data, and negotiate like your bottom line depends on it.
Curious whether your renewal offer is really your best option? Click below to schedule a no cost consultation to discuss your circumstances.
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.