Office Lease Concessions: What Tenants Need to Know

Lease concessions are incentives that landlords offer tenants beyond the basic rental rate to make a lease more attractive. They are a key part of office lease negotiations and can significantly affect total occupancy cost, flexibility, and long-term risk.

While rent is usually the first thing tenants look at, lease concessions are often where the real value of a lease is created. Understanding lease concessions is an important first step when evaluating new office space, renewals, or relocations.

What Are Lease Concessions?

Lease concessions are negotiated lease terms that provide financial relief or operational flexibility beyond base rent.

Common office lease concessions include:

• Free rent or rental abatement
• Tenant improvement allowances (TIA)
• Early access to the office space
• Expansion, contraction, or termination rights
• Sublease and assignment rights
• Caps on operating expenses and real estate taxes
• Additional benefits such as parking, signage, or storage

Why Lease Concessions Matter

Lease concessions directly affect upfront costs, long-term expenses, and flexibility over the life of a lease. Some provide immediate savings, while others deliver long-term value through flexibility and cost control.

Concessions should be evaluated across the full lease term. The right mix depends on business priorities, timing, and tolerance for long-term risk.

Why There Is No Standard Concession Strategy

Tenants often assume concessions are standardized or that more is always better. In reality, there is no one-size-fits-all concession strategy.

Even leases that look similar on paper may demand fundamentally different concession structures. Factors such as capital availability, growth plans, operational complexity, and long-term occupancy goals all influence which concessions create real value.

Landlord constraints also play a role. Ownership structure and financial positioning influence which concessions landlords are able to offer.

Without a tailored strategy, tenants risk negotiating concessions that do not align with their objectives or missing opportunities altogether.

“Not every landlord can offer the same concessions, and a lot of that comes down to their financial position. Some owners are better able to offer free rent instead of cash allowances, while others may lean toward a lower rental rate rather than concessions. There simply is no one-size-fits-all approach to structuring a lease.”

Mindy W. Saffer, LEED AP, Executive Managing Principal, Cresa

How Tenants Can Approach Concessions Strategically

A strong concession strategy starts with understanding the market and the landlord. Competitive supply, transaction timing, and ownership dynamics all influence what is negotiable. Having an advisor that is informed about these factors can help when establishing a real estate strategy.

Tenants that plan early are better positioned to:

• Create leverage through competition
• Compare multiple deal structures
• Prioritize concessions that support long-term needs
• Negotiate proactively rather than under time pressure

A strategic approach allows tenants to negotiate from a position of strength rather than urgency.

How Cresa Helps Tenants Maximize Concession Value

Cresa exclusively represents tenants, allowing our advisors to pursue concession strategies focused solely on occupier outcomes. Because we are not competing with landlords or representing ownership, we are able to pursue more competitive and informed negotiations on behalf of occupiers.

Drawing on thousands of transactions, deep landlord relationships, and real-time market insights, Cresa advisors know where flexibility exists and how to structure concessions that align with your business priorities. This experience allows us to identify pressure points, compare options across multiple deal scenarios, and secure concessions that are rarely offered proactively.

Learn More

Lease concessions are where meaningful savings and flexibility are created in an office lease, but only when they are structured strategically.

To explore this topic in more detail, download our full whitepaper:
Concessions: Maximizing Value with a Tailored Strategy