Landlord Rent Concessions

My current lease expires on Dec 31st. We are in year 10 of a 5 year lease that had a 5 year renewal option…which we obviously excersised.

We currently have another 5 year lease with a 5 year option on the table waiting for my signature. My question is: would it be unreasonable for me to ask for some rent concessions in order to free up some cash to do tennant improvements…after 10 years the place could use a little upgrading. How many months rent should I ask for? I would like to get at least 3 months if not a couple more, or am I completely out of line for even asking.

I think that’s completely in line - you’re a fantastic tenant!!

We have just gone through that and got 1 months free rent to cover improvements which are part of our lease. We will be closed for just under 2 weeks to do the re-fit and the rent free period will go towards lessening the lost sales for the period. Not the best deal but beats having nothing. Unfortunately we deal with a MAJOR corporate lease agent and they have stones for hearts so I’m happy with what we got.
Dealing with a smaller landlord you should be able to get 2 months free.


IMO this is something that should have been addressed a few months ago. You have six weeks of lease left, which leaves you very little room to negotiate. Six months ago you could have bluffed your landlord into some concessions, but unless there’s an empty restaurant down the street, it’ll be hard to convince him that you need the concessions or you’ll be forced to move. It never hurts to ask, but I think you would have been more likely to get a favorable response if it you asked during the summer.

Paul7979 is right.

If you are approaching the end of your lease the time to address the next lease, LL contributions to remodel/improvements etc is 1-2 YEARS before the lease is up. Give yourself plenty of time to find a new location and move so that your threat to do so is credible. Some LLs will not want to do this. My response to them would be that you interpret that to mean that you will not be getting an agreement you are happy with and it is time to start looking. A better LL will understand that keeping a good tenant is far better than taking on turnover expenses.

From the LL perspective, a typical turnover expense is a few months of vacancy, a substantial remodel or new TI allowance and a leasing commission. To place a new tenant for 5 years, a typical total might be 6 months rent or more. Better LL’s realize this and will want to either recognize this with a rent holiday or $$ if that money goes into the property.

On the other hand, if you have a below market lease or the LL has other plans for the space, you want to know what the future looks like a lot sooner than 6 weeks before the end of your lease!

Don’t forget that in the scenario described above, you should be seeking a new MARKET rate lease. If rents have gone down in your area (like they have in most areas) your new rent should be lower than your old rent.

If you do not like the offer on the table, one possible idea is to tell the LL you want a 2 year lease rather than a 5 year to give you time to find a new location with more advantageous terms. That will wake him up.

All of this involves some risk since you did not open this discussion at the time you should have.