The Leases That Age Well Aren’t the Cheapest
CFO Series | Week 3 of 6
By Chris Rohrer & Pete Kostroski | Co-Owners
Why are CFOs usually the only ones in the room asking what happens if the forecast is wrong?
Because they’re the only ones accountable when it is.
In most office lease negotiations, the energy moves in one direction: toward execution. Space needs are defined. Market comps are shared. Concessions are framed as progress. Momentum builds, and momentum feels productive. A signed lease becomes the finish line.
But for a CFO, signing the lease is the starting point of financial exposure, not the end of the process.
That’s where the tension lives.
The Questions That Rarely Shape the Deal
CFOs tend to ask questions that slow the room down.
What if headcount stalls? What if hybrid remains the norm longer than expected? What if this space makes sense today but becomes inefficient five years from now?
These aren’t pessimistic questions. They’re capital allocation questions. They reflect the reality that forecasts miss, markets shift, and business priorities change.
Yet those questions rarely determine lease structure. Often, the deals are built around the upside case where growth assumptions hold, utilization increases, strategy stays consistent. When that happens, a disproportionate structural risk gets embedded into the document. And structural risk is what lingers.
The Best Lease Structures I’ve Seen Weren’t the Lowest Rent
They were the most resilient.
They didn’t assume the growth plan would unfold exactly as modeled. They allowed companies to contract space as well as expand under negotiated terms. They created economically rational exit paths instead of punitive ones. They preserved flexibility without requiring renegotiation leverage that may not exist in the future.
None of that shows up cleanly in a rent comparison.
Rent is easy to measure. Free rent is easy to quantify. Tenant improvement allowances can be modeled precisely.
Optionality requires scenario analysis. It requires admitting that certainty is temporary.
That’s why it’s often undervalued.
Optionality Has a Financial Impact, Whether It’s Priced or Not
Flexibility isn’t a philosophical benefit. It has a measurable impact on occupancy cost risk and long-term financial outcomes.
When a company can shrink without triggering disproportionate penalties, capital is preserved. When exit provisions are structured thoughtfully, downside exposure narrows. When operating expense language includes real guardrails, volatility is managed rather than absorbed blindly.
Those protections don’t make headlines during negotiation.
But they are often what determine whether the lease still works under stress.
Because the stress eventually comes.
Most Risk in CRE Isn’t Market Risk
It’s structural risk baked into the lease.
It’s in termination provisions that exist on paper but are economically impractical. It’s in expansion clauses that reset pricing to whatever the future market dictates. It’s in expense provisions that quietly shift variability to the tenant.
When assumptions hold, these details feel minor.
When assumptions break, they dominate the conversation.
And once the lease is signed, leverage disappears. Structure becomes fixed. What once felt flexible becomes contractual reality.
Making the Right Perspective Central
CFOs are often the only people in the room modeling “what if we’re wrong.” Not because they’re resistant to growth. Because they’re accountable for risk. When real estate strategy incorporates that mindset, when lease structures are built around variability instead of perfection, decision quality improves. The strongest leases don’t just look competitive in the market. They perform when conditions shift.
And in commercial real estate, it’s not the forecast that determines the outcome.
It’s the structure.
Are you evaluating a lease decision or preparing for a renewal? Connect with Rokos Advisors to ensure your lease structure protects flexibility, manages risk, and supports long-term financial performance.
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.