Lease renewal strategy starts 18–24 months before expiry: market the requirement to two real alternatives, run a relocate-vs-renew model, and negotiate as if you were a new tenant — landlords concede most when they believe you will leave.
Run a real RFP to two alternatives — landlord concession scales with credibility.
Renewal terms are typically 5–15% better than a fresh deal at the same building.
Watch for redaction risk if you do not engage tenant rep.
Run a quantified relocate-vs-renew model — the answer is not always 'renew'.
Build a refresh capex into the renewal — landlord typically funds 50–100%.
Lease Renewal Strategy
Lease renewal strategy starts 18–24 months before expiry: market the requirement to two real alternatives, run a relocate-vs-renew model, and negotiate as if you were a new tenant — landlords concede most when they believe you will leave.
Run a real RFP to two alternatives — landlord concession scales with credibility.
Renewal terms are typically 5–15% better than a fresh deal at the same building.
Watch for redaction risk if you do not engage tenant rep.
Run a quantified relocate-vs-renew model — the answer is not always 'renew'.
Build a refresh capex into the renewal — landlord typically funds 50–100%.
What this is
Lease renewal strategy is the structured approach to renegotiating a Class A lease at expiry, including timing, leverage construction, the relocate-vs-renew test, and the renewal-specific negotiation playbook. The structural reality: incumbent tenants are extraordinarily expensive for landlords to lose (re-leasing costs, downtime, fit-out">fit-out re-investment, broker fees), so credible departure threats translate directly into concessions. The renewal is, in effect, a competitive deal where the landlord is one of the bidders.
Start 18–24 months before expiry
The renewal clock runs long. By 24 months out, you should have engaged tenant rep, refreshed the workplace strategy, and started a quiet market scan. By 18 months out, you should have issued a real RFP to at least two alternative buildings. By 12 months out, you should be in active LOI negotiation with the incumbent and one alternative. By 6 months out, the renewal LOI should be signed.
The single biggest renewal mistake is waiting until 9–12 months out — at that point you have lost most of your leverage because the landlord knows you cannot run a real relocation in the time available.
Build credible alternatives
The landlord's renewal offer scales with the credibility of your alternatives. 'I'm thinking about it' yields nothing. 'I have two LOIs from buildings X and Y at these terms' yields material concession. The credibility of the alternatives is everything — your tenant rep needs to actually engage two competing landlords, not perform the engagement.
A credible alternative LOI requires you to have actually run the relocate model, costed the move, and concluded the alternative is workable. The landlord's broker will diligence the alternative — if it is a fiction, the renewal posture collapses.
The relocate-vs-renew model
Relocate cost = move cost + fit-out cost − new TI allowance + downtime + broker fee + dilapidations on the existing space. Renew cost = renewal-period rent over the new term − refresh capex + minimal move cost.
In a typical Class A renewal, the all-in cost of relocating exceeds renewal by USD 80–200/sf for a same-size, same-spec deal. The landlord knows this — but also knows that staff disruption, brand value, and operational risk make 'somewhat more expensive to relocate' a marginal threat.
The renewal makes economic sense in most cases. But run the model — for some occupiers (substantial right-sizing, brand repositioning, ESG upgrade requirement) relocation is the right answer.
Renewal-specific concessions
Renewals attract a structurally different concession package than fresh deals. Free-rent abatement is typically half what a new tenant would get (1 month per year, vs 1.5–2 for a new deal). TI allowance is structured as a 'refresh capex' — typically USD 25–60/sf, landlord-funded, on a pre-agreed scope. Rent reduction is rare; instead, the landlord concedes on operating-expense base year, escalator step-down, or term flexibility (right to extend, right to terminate at year 5).
Bundle: aim for refresh capex + opex base year reset + extended option + termination right at year 5. The landlord prefers giving you optionality over giving you cash.
Refresh capex: the renewal sweetener
A refresh capex programme — re-paint, re-carpet, re-fit reception, modernise meeting rooms, upgrade AV, refresh furniture — typically costs USD 25–60/sf and the landlord will routinely fund 50–100% as a renewal sweetener. The landlord prefers spending USD 50/sf on refresh than letting the space go vacant and spending USD 150/sf on a full new fit-out for the next tenant.
Negotiate refresh capex into the LOI; specify the scope and quality bar; insist on tenant control of vendor selection (cash, not in-kind).
Tenant rep is non-optional
On a renewal, more than a fresh deal, tenant rep is non-optional. Landlords consistently concede less to unrepresented incumbents — partly because the negotiation is asymmetric (landlord knows the market, tenant does not), partly because the credibility of the alternative-LOI threat depends on actual broker engagement.
Tenant rep fees on renewals are paid by the landlord (US, UK) or by both sides per local convention. There is no fee-saving from going unrepresented — only a net concession-loss.
Right-sizing at renewal
Renewal is the natural moment to right-size the footprint. Hybrid policy adoption since 2020 means most pre-pandemic Class A leases are now 15–30% over-sized. Use the renewal to give back floors (landlord typically welcomes for re-leasing at a higher rent), or to take adjacent space at favourable terms (the landlord will discount adjacent space materially if it consolidates a renewing tenant onto contiguous floors).
Decision aid
If your lease expires within 24 months: engage tenant rep now, refresh the workplace strategy, issue a real RFP to two alternatives, build the relocate-vs-renew model with realistic numbers, and target a renewal LOI 12 months before expiry. Bundle refresh capex, opex base year reset, extended option, and termination right at year 5.
Frequently asked questions
When should I start the renewal?
24 months before expiry. Tenant rep engaged then; RFP issued at 18 months.
Will the landlord match a relocation offer?
Usually yes, within 5–15%. The cost to the landlord of losing you is much higher than the cost of the concession.
Is renewal always cheaper than relocation?
Usually but not always. Run the model — substantial right-sizing or ESG upgrade can flip the answer.
Can I right-size at renewal?
Yes — give back floors or take adjacent space. Renewal is the natural moment for footprint re-balancing.
Do I need tenant rep on a renewal?
Yes. Unrepresented incumbents consistently concede 5–15% more value than represented ones.
Related guides
The Class A lease renewal playbook — How to approach a Class A renewal — timing, leverage, and the small set of mistakes that cost the most.
UK rent review playbook — How to approach a UK upward-only rent review without giving the landlord the entire upside.