Pulse Reviews and Analysis
What Concessions Can I Ask for Besides Free Rent?
Curated by Kory White · Fractional CRO, CRO Syndicate
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Don’t get screwed.</text><text x="58" y="258" font-family="Arial,Helvetica,sans-serif" font-size="30" font-weight="600" fill="#6b5b4d">Leases, TI, NNN & buildouts — negotiated in your favor</text><g transform="translate(1010,86)" fill="none" stroke="#C0531F" stroke-width="9" stroke-linejoin="round"><rect x="20" y="40" width="150" height="130"/><line x1="20" y1="40" x2="95" y2="6"/><line x1="170" y1="40" x2="95" y2="6"/><rect x="50" y="80" width="36" height="36"/><rect x="104" y="80" width="36" height="36"/><rect x="74" y="128" width="42" height="42"/></g></svg>
What Concessions Can I Ask for Besides Free Rent?
Direct Answer
Free rent is the concession everyone fixates on — and it's the *least* of what's available. A well-represented tenant pulls a stack of concessions, each worth real money: TI allowance ($20–$80/sq ft), moving allowance ($2–$10/sq ft), escalation caps (2–3% vs. 4%+), early termination options, expansion and contraction rights, operating-expense (CAM) caps, a free parking allotment, and a renewal option at a pre-set rate.
Stacked together, these often dwarf the value of an extra month or two of free rent.
The reason matters: landlords protect face rent because it sets the building's valuation comps and their loan terms. So they prefer to give value through everything *except* the headline rate. That's your opening — pile on the non-rent concessions, because the landlord can grant them without hurting the rent roll.
A 10,000 sq ft tenant who wins $50/sq ft TI ($500,000), a 3% escalation cap instead of 4%, and an early termination option has captured far more value than the tenant who only haggled free rent.
The move: build a written concession stack, attach it to a term commitment, and let the landlord choose which levers to pull — every one of them lowers your net effective rent.
The Full Concession Menu
Here's the menu, ranked by typical dollar value:
| Concession | Typical range | Why it matters |
|---|---|---|
| TI allowance | $20–$80/sq ft | Landlord funds your buildout — the biggest non-rent prize |
| Free rent / abatement | 1 month per year of term | Front-loaded cash relief |
| Escalation cap | 2–3% vs. 4%+ | Compounds over the whole term |
| Operating expense / CAM cap | 3–5% annual on controllables | Stops cost creep on your pass-throughs |
| Moving allowance | $2–$10/sq ft | Covers relocation/IT cabling |
| Early termination option | Year 3–5, defined fee | Buys back flexibility |
| Expansion rights / ROFR | Adjacent space | Room to grow at known terms |
| Contraction option | Give back 20–30% | Room to shrink |
| Renewal option | Pre-set or capped rate | Locks future leverage |
| Free/reduced parking | Per-stall waiver | Real money in dense markets |
Each lever reduces your real cost. CBRE, JLL, and Cushman & Wakefield occupier teams all coach tenants to negotiate the package, not the headline — because the package is where landlords hide (and give) the actual value.
👉 Quick Call with Kory White, Fractional CRO · See Kory on LinkedIn · CRO Syndicate
The Money Concessions: TI, Escalations, and CAM
These three move the most dollars.
Tenant improvement allowance is the heavyweight. New leases command $30–$80/sq ft for office buildout; even renewals fund $10–$40/sq ft. Demand a cash allowance with a draw schedule (not reimbursement-only, which forces you to front the cash), and require unused TI to convert to rent credit so the landlord can't pocket the difference.
Escalation caps are quietly enormous. The difference between 3% and 4% annual bumps on a $400,000/yr lease over 7 years is roughly $90,000 in cumulative rent. Cap escalations at 2–3%, or negotiate a flat Year-1 step.
Operating-expense / CAM caps protect you on pass-throughs. Landlords pass building costs — taxes, insurance, maintenance — to tenants. Without a cap, "controllable" expenses can climb 5–8% a year.
Negotiate a 3–5% cap on controllables, demand a base-year definition (gross leases), and secure audit rights so you can verify the charges. BOMA and IREM both publish the operating-expense methodologies landlords use — knowing them lets you challenge inflated pass-throughs.
The Flexibility Concessions: Don't Get Trapped
Money concessions lower cost; flexibility concessions protect you from being trapped in the wrong space.
- Early termination option: the right to exit at, say, Year 3 for a defined fee (typically 6–9 months' rent + unamortized TI and commissions). Worth its weight if your forecast is uncertain.
- Expansion rights / right of first refusal (ROFR): if you grow, you get first crack at adjacent space at pre-agreed terms — no scramble, no relocation.
- Contraction option: give back 20–30% of your space at a defined date if you shrink, so you're not paying for empty floors.
- Renewal option: extend at a pre-set rate or a capped "fair market value," preserving your leverage at expiration.
- Sublease/assignment rights: with reasonable (not absolute-discretion) landlord consent, so you can offload space if plans change.
These cost the landlord almost nothing to grant up front but can save you hundreds of thousands if your needs change — which is exactly why you negotiate them while you have leverage, not when you're desperate.
The Overlooked Concessions
Easy wins tenants forget to ask for:
- Moving allowance: $2–$10/sq ft to cover relocation, cabling, and IT — separate from TI.
- Free or reduced parking: in dense markets a stall runs $100–$400/month; waiving even 20 stalls is real annual money.
- Signage rights: building or monument signage at no extra cost — valuable for retail and brand visibility.
- HVAC after-hours: free or capped after-hours HVAC if your team works late.
- Cure/self-help rights: if the landlord fails to fund TI or make repairs, you can offset against rent.
- Construction rent abatement: free rent during the buildout period so you're not paying for space you can't occupy.
Ask for all of them. The marginal cost of adding line items to your RFP is zero, and landlords routinely concede the small ones to protect the face rate.
How to Stack and Win Them
- Hire a tenant-rep broker — landlord-paid, pulls comps, and knows which concessions are live in your market.
- Get a competing term sheet so the landlord knows you can walk.
- Submit a written RFP listing every concession with target numbers — anchor high across the whole stack.
- Tie the stack to your term commitment: "We'll do 7 years for this package."
- Let the landlord choose levers — they'll protect face rent and give on TI, escalations, and flexibility. Take it.
- Lock the mechanics in the lease: draw schedules, caps, audit rights, defined termination fees.
FAQ
What's the single most valuable concession besides free rent? The TI allowance — $20–$80/sq ft of landlord-funded buildout. On a 10,000 sq ft space at $50/sq ft, that's $500,000, far more than a couple months of free rent.
Why do landlords prefer giving concessions over cutting face rent? Face rent sets the comps that drive the building's valuation and the landlord's loan terms. Concessions like TI, free rent, and escalation caps lower your real cost without hurting the rent roll — so landlords give there first.
How much can an escalation cap save me? Capping annual bumps at 3% instead of 4% on a $400,000/yr lease saves roughly $90,000 over a 7-year term. Escalation caps compound, so they're worth fighting for.
What flexibility concessions should I prioritize? An early termination option, expansion/contraction rights, and a renewal option at a pre-set rate. They cost the landlord little up front but protect you from being trapped if your space needs change.
What concessions do tenants most often forget to ask for? Moving allowance ($2–$10/sq ft), free parking, construction-period rent abatement, CAM/opex caps with audit rights, and self-help cure rights. Adding them to your RFP costs nothing and landlords often concede the smaller ones readily.
Sources
- CBRE, "Occupier Services: The Full Concession Package Beyond Free Rent"
- JLL, "Lease Negotiation: TI, Escalations, and Flexibility Concession Benchmarks"
- Cushman & Wakefield, "Tenant Advisory: Building a Concession Stack"
- NAIOP, "Net Effective Rent and Concession Economics"
- BOMA International, "Operating Expense Pass-Through and CAM Methodology"
- IREM, "Income/Expense Analysis and Lease Concession Trends"
- The Tenant Advisor (tenant-rep brokerage), "Concessions to Negotiate Besides Free Rent"