5 Ways Businesses Overpay in Their Lease — And How to Stop
By Chris Rohrer, Broker & Pete Kostroski, Broker | Rokos Advisors
Commercial leases are complicated. For many business owners and executives, rent feels like the obvious number to focus on, but it’s often just the starting point. The truth is that companies routinely overpay in ways that aren’t obvious until years later.
The good news? With the right strategy, most of these costs can be reduced or avoided altogether. Here are five of the most common ways businesses overpay in their lease, and how to stop it from happening.
Ignoring Market Comparisons
Landlords love renewal tenants because most don’t test the market. If you’re not actively comparing your lease terms against similar properties, you’re negotiating blindly. Even a small difference in rent—50 cents to $1 per square foot—can mean tens or hundreds of thousands of dollars across a multi-year deal.
How to stop it: Always benchmark your deal. Even if you fully intend to stay, having alternatives on the table gives you leverage. Market comps aren’t just about rent, either — they help you negotiate concessions like free rent, tenant improvements (TI) dollars, and operating expense structures that reflect current market standards.
Accepting Unlimited Operating Expenses
Base rent may feel like the “big number,” but operating expenses are often the silent budget killer. Taxes, insurance, maintenance, utilities — these are nearly always passed through to tenants. And unless capped, they can climb unpredictably over time. It’s not uncommon for OpEx increases to outpace rent escalations, leaving tenants paying far more than they budgeted for.
How to stop it: Push for caps on controllable operating expenses, audit rights, and transparency on what’s included. A landlord may not remove all pass-throughs, but creating predictability protects your budget and avoids being hit with unexpected costs year after year.
Leaving Tenant Improvement Dollars on the Table
Landlords advertise TI allowances like a gift — but they’re really an investment in keeping their building leased. Too many tenants accept whatever’s offered, only to realize it doesn’t cover actual construction costs. Others let the landlord manage the buildout, only to see inflated costs and limited choices.
How to stop it: TI negotiations should reflect current market pricing, not outdated numbers. Negotiate for flexibility: roll unused TI dollars into future projects or direct them toward rent credits if not used. And whenever possible, retain control of the buildout process so you can manage bids and scope directly.
Overlooking Flexibility Clauses
No business can perfectly predict its future. But without flexibility written into your lease, you may pay dearly when circumstances change. Expansion rights, sublease provisions, and termination options aren’t “nice to haves” — they’re cost-saving tools. Without them, you risk paying for empty space or scrambling to find room when you need to grow.
How to stop it: Negotiate expansion rights adjacent to your space, sublease language that doesn’t overly restrict your ability to backfill, and termination options that give you an exit if business needs shift dramatically. Flexibility is essentially an insurance policy — one that can save enormous sums down the line.
Treating Free Rent as a Throwaway Concession
Free rent often grabs headlines in a deal, but tenants rarely maximize its value. Too often, it’s simply stacked at the front of the lease as a move-in perk, without considering how it could be used to improve cash flow over time.
How to stop it: Structure free rent to align with your business’s financial reality. Need relief during buildout? Front-load it. Worried about escalating expenses? Spread it out later in the term. The number of months matters less than how those months are timed to support your business.
Overpaying in a lease rarely comes from a bad rent number, it comes from missed opportunities in the details. Landlords negotiate these deals every day; tenants only do them once every few years. That imbalance is why so many businesses end up with higher costs than they should.
With the right strategy, benchmarking, and negotiation, businesses can flip the script — turning leases from a financial burden into a tool for stability, flexibility, and growth.
Looking at a lease renewal or new space? Connect with Rokos Advisors today to see where you could be saving.
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.