THE STORY
This Happens More Than You Think
I was working with a tenant whose lease was expiring at the end of July. We had been talking for a while about getting ahead of it. They finally agreed to start the process in February — tight, but workable.
Once we got their lease documents organized, one big issue popped up: they didn’t have a renewal option.
And at the same moment, their neighbor was growing — and that neighbor had both a Right of First Offer (ROFO) and Right of First Refusal (ROFR) on their space.
HOW THE SITUATION UNFOLDED
THE OUTCOME
This Wasn’t a Negotiation Anymore
They didn’t have a choice. They had to move. And it wasn’t a simple office move either.
The Cost of No Renewal Option:
- A large, expensive piece of equipment had to be relocated — unplanned and unbudgeted
- Significant added cost, complexity, and timing pressure compressed into weeks
- New space had to be found and negotiated before the move process could even begin
- All of this was entirely avoidable with a single lease clause
ROOT CAUSE
No Renewal Option = No Control
Without a renewal option, three things happen that put you at a severe disadvantage:
THE SOLUTION
What a Renewal Option Actually Does
Think of it less as locking you in — and more as protecting your position. A renewal option is a right, not an obligation. You can always choose not to exercise it. But having it changes everything.
THE BOTTOM LINE
Don’t Wait Until It’s Too Late
Most tenants assume they’ll just renegotiate when the time comes.
But the market, the landlord, and other tenants don’t operate on assumptions.
Audit your lease today. If you don’t have a renewal option, make getting one your top priority.
