Your Office Lease Is Up for Renewal: What to Review Before You Sign Again
Many companies will face office lease renewals in 2026. Market conditions are shifting, operating expenses are rising, and hybrid work has changed how teams use space. A renewal is no longer a routine step. It is a chance to evaluate whether the current location still supports your team and whether the next lease term should remain the same or change.
This guide explains how to decide between renewing or relocating, what rent increases landlords can apply, and what to review during a lease renewal inspection.
How to Decide Whether to Renew or Relocate
Before reviewing lease terms, teams should evaluate whether the space still fits their needs. Here are the primary factors to consider:
Space usage
Is the team using the whole space every week? Are there underutilized areas? Hybrid work patterns often reduce required square footage.
Team growth or consolidation
Upcoming hiring plans or department changes may require more or less space.
Performance of the location
Some markets remain essential for talent and operations. Others no longer justify the same level of investment.
Condition and amenities of the building
Tenants often want flexible layouts, reliable systems, and modern shared amenities. Buildings that have not been upgraded may not justify higher renewal rates.
Changes in operating cost
Insurance, utilities, CAM, and taxes continue to increase in many buildings. Reviewing these cost categories helps teams understand the actual cost of the next term.
A renewal often makes sense when the location still supports operations, and the landlord is willing to negotiate. If nearby buildings offer better value or a layout that fits current work patterns, relocation should be considered.
What Rent Increases Can Landlords Apply at Renewal
Commercial leases do not follow residential rent control rules. Rent increases are based on terms written in the lease or new terms negotiated during renewal.
The most common increase types are listed below.
Contractual annual increases
Many leases include 2-4 percent escalations each year. These continue unless renegotiated.
Adjustments to market rent
If the clause states that rent resets to market, the landlord may propose a new rate based on comparable buildings, vacancy levels, and building quality. Tenants can request market data to validate the number.
Increases to operating expenses
Insurance, property taxes, utilities, and building services often rise each year. These increases are not technically rent increases, but they raise total occupancy cost and should be reviewed.
Caps and exclusions
Some leases limit increases on controllable expenses or exclude specific categories. These limits can protect tenants from unexpected costs.
Understanding how the lease treats each type of escalation is essential for modeling future cost.
Office Lease Renewal Inspection Checklist
A structured review helps teams understand the space's condition, clarify responsibilities, and prepare for negotiation. For a simple one-page version you can use internally, download the checklist here:
Download the Lease Renewal Checklist
Below is the expanded version used throughout this guide.
Documentation review
- Original lease and amendments
- Renewal window and notice deadlines
- Current rent schedule and escalation clauses
- Operating expense structure and historical increases
- Maintenance and repair responsibilities
- Parking, signage, and storage rights
- Any sublease, expansion, or contraction options
Physical space inspection
- Exterior condition, including lighting, signage, and access points
- Interior condition, including flooring, walls, fixtures, and restrooms
- Mechanical systems such as HVAC, electrical, and plumbing
- Life safety systems and ADA accessibility
- Repairs or upgrades needed before renewing
- Notes and photos documenting any issues
Vendors and services
- Janitorial quality and pricing
- Security and access systems
- Utility usage trends
- Equipment maintenance contracts
- Any service issues or recurring disruptions
Financial review
- Base rent compared to nearby buildings
- Operating expense history
- Expected operating expense increases
- Scheduled capital improvements that may affect cost
- Total occupancy cost modeling for the next term
Strategic fit assessment
- How well the layout supports current work patterns
- Expected headcount changes
- Need for more collaboration areas or fewer desks
- Space efficiency compared to market alternatives
Items to prepare for negotiation
- Repairs or improvements required
- Desired changes to lease length or key terms
- Tenant improvement requests
- Market comparables to support your position
- Budget targets and walk-away thresholds
Common Mistakes During Lease Renewals
Teams often miss opportunities when renewals are handled quickly. The most frequent issues are listed below.
- Missing the notice window
- Not benchmarking the current market before negotiating
- Overlooking increases in operating expenses
- Carrying forward outdated terms
- Failing to document problems in the space
- Accepting escalations without modeling long-term cost
A structured approach helps avoid last-minute decisions and improves negotiation outcomes.
How Software Helps Teams Manage Renewals
Many renewal problems come from scattered information. Documents, dates, rent schedules, and inspection notes may live in different systems. Modern lease administration software centralizes this information, which helps teams prepare earlier and negotiate with more clarity.
- Renewal dates and notice deadlines tracked automatically
- All documents stored in a single location
- Rent schedules organized and auditable
- Inspection notes saved directly with the lease
- Dashboards that highlight upcoming expirations
Centralized data supports better planning and reduces renewal risk.
Final Thoughts
A lease renewal is an important moment to review how your space supports your team and how the total cost is trending. With vacancies still elevated in many regions and operating expenses rising, tenants often have more leverage than they expect. A structured review that includes market research, cost modeling, and a detailed inspection helps teams secure better terms and avoid unnecessary cost increases.
Brooke Colglazier
Marketing Manager