When To Exercise a Lease Renewal Option

Lease renewal options are one of those rights often requested by commercial building tenants, but without the business owner or manager's full understanding of the detailed terms of a lease option. In fact, I've found while operating my business, Indianapolis based Carmen Commercial Real Estate Services, that it's not uncommon that notice periods, option rental rates, and length of option term are unilaterally inserted into the option language by landlords without the business owner or manager's understanding of these components and thus, the right is substantially watered down. It's not enough to request an Option to Renew. When negotiating this seemingly simple right in your lease, consider the many factors that will control the renewal terms and ultimately impact your business downstream.

One of the most critical components of an Option to Renew clause is the timing of when the tenant must pull the trigger on the option to extend the lease, known as the Notice Date. The following is a thoughtful blog post that appeared on the SquareFeet.com blog site regarding this topic.

When To Exercise a Lease Option Square Feet Commercial Real Estate Blog