Not every lease offer comes with the same perks. Sometimes the terms on the table look straightforward on paper — until you realize what's missing.
A recent industrial proposal came back with a clear structure: 5-year term, 4% annual rent escalations, no tenant improvement allowance, no free rent, and no renewal options.
On the surface, that's a workable deal. But each missing piece shifts real cost and risk onto the tenant.
No TIA (tenant improvement allowance). Any buildout — walls, flooring, electrical, fixtures — comes entirely out of the tenant's pocket. For a space that needs real work, this can mean tens of thousands of dollars upfront.
No free rent. Most landlords offer a month or two of free rent to offset the buildout period. Without it, rent starts accruing the day you sign, even while you're still under construction.
No renewal options. When the 5 years are up, there's no guaranteed right to stay. You either renegotiate from scratch — with no leverage if the landlord has other interest — or you move.
4% annual escalations. This compounds. Rent that starts reasonable can climb significantly by year five, and it's worth running the actual numbers before signing.
Read past the headline terms. Term length and base rent are only part of the picture. What's absent from an offer often matters as much as what's included.
Price the buildout before you sign. If there's no TIA, get a real contractor estimate first — not after you've committed.
Negotiate what you can. Even a small free rent period or a single renewal option can materially change the deal's economics.
If your next lease offer is missing free rent or a TIA, would you know what that actually costs you?
Evaluating a lease offer and want a second set of eyes on what's really in it? Let's go through it together.
Michael Reyes
Anchor Point Commercial Group | eXp Commercial
915-348-3100
MReyes@AnchorPointCommercial.com