When your commercial lease is expiring, you can renew through an option, renegotiate, blend-and-extend, relocate, expand or downsize, sublease or assign, or negotiate an early termination. The best choice depends on your space needs, your lease terms, and the Austin market, and the most important step is starting 12 to 24 months before expiration so moving stays a real alternative.
This guide walks through the timeline, each option, and the clauses to find in your own lease. If you would rather have someone read the lease for you, see our lease renewal service.
Lease expiration timeline: what to do and when
| Months before expiration | What to do |
|---|---|
| 24 | Find your lease and every amendment. Note the expiration date, renewal option, and notice deadlines. Start thinking about how much space you will need. |
| 18 | Define requirements: headcount, layout, location, budget. Engage a tenant rep if you plan to. Benchmark your rent against current deals. |
| 12 | Tour alternatives. Request proposals from other landlords and your current one. Ask contractors about buildout time for any move. |
| 9 | Compare proposals on total cost. Negotiate the renewal or a letter of intent on new space. Confirm any option notice deadline is still ahead of you. |
| 6 | Sign the renewal or new lease. If moving, start design, permits, and buildout. |
| 3 | Plan the move, notify vendors, and confirm your move-out restoration obligations so you are out on time. |
These are general guidelines. Larger spaces, medical and restaurant uses, and anything needing heavy buildout should start at the long end, or earlier.
Your options when a commercial lease expires
Renew through your renewal option
A renewal option lets you extend on terms written into the lease, usually by giving written notice inside a set window.
- Pros: certainty, no move, no buildout disruption.
- Cons: the renewal rent may be fair market value as set by the landlord, and the option rarely includes new concessions.
- When it fits: you like the space, the option terms are good, and the market has not moved in your favor.
Renegotiate the lease
You can negotiate new terms whether or not you have an option.
- Pros: you can address rate, free rent, TI allowance for a refresh, term, and clauses that no longer fit.
- Cons: takes time and works best when the landlord believes you might leave.
- When it fits: most renewals. It pairs with benchmarking and real alternatives.
Blend-and-extend
A blend-and-extend adds years to your lease before it expires, in exchange for a new rate that blends your remaining rent with new market rent.
- Pros: can lower rent now, and locks in your space early.
- Cons: commits you to a longer term, and the blended math needs checking.
- When it fits: you plan to stay, and either market rents have softened or the landlord values a longer commitment.
Relocate
- Pros: a better fit, location, or cost, and new concessions from a landlord competing for you.
- Cons: moving costs, buildout time, downtime, and restoration costs at your old space.
- When it fits: your space no longer works, or the market offers meaningfully better value. Even if you stay, a credible relocation option strengthens your renewal talks.
Expand or downsize
- Pros: right-sizes your occupancy cost to how you actually use the space.
- Cons: expansion depends on adjacent space being available; downsizing may mean a move.
- When it fits: headcount, hybrid work, or operations have changed since you signed.
Sublease or assign
A sublease rents some or all of your space to another tenant while you stay on the lease. An assignment transfers the lease itself.
- Pros: recovers cost on space you do not need.
- Cons: requires landlord consent in most leases, and you often remain liable.
- When it fits: you need less space before expiration and a full exit is not available.
Negotiate an early termination
- Pros: a clean exit before the term ends.
- Cons: usually requires a termination right in the lease or landlord agreement, plus notice and a fee.
- When it fits: your business needs have changed and the cost of staying is higher than the fee.
Holdover (and why it is risky)
Holdover is staying after expiration without a new agreement. Leases typically set holdover rent at a premium over your last rent, and some make you liable for the landlord’s damages if a new tenant is delayed. Holdover can also turn into month-to-month occupancy that the landlord can end on short notice. Treat it as a short emergency bridge at most, never as a plan.
How to compare renewing with moving
Compare total occupancy cost over the same term, not the starting rate. For staying, that means renewal rent, escalations, operating expenses, and any refresh allowance. For moving, add buildout costs above the TI allowance, furniture and cabling, moving costs, downtime, and restoration at your old space. Then subtract the new landlord’s concessions, such as free rent.
For example, a hypothetical new space might quote a lower rate than your renewal, yet cost more once moving and buildout are counted. Or it might still come out ahead over a longer term. Our lease cost calculator helps you model both sides on the same basis.
Checklist: clauses to find in your own lease
- Expiration date, including any amendments that changed it
- Lease term and renewal options: number, length, and how renewal rent is set (fixed, set increase, fair market value, or CPI)
- Notice window and delivery method for exercising an option
- Holdover rent and liability
- Early termination right, notice, and fee
- Relocation clause
- Restoration and removal obligations at move-out
- Assignment and subletting consent standards
- Operating expense and CAM provisions, including caps
- Right of first refusal on adjacent space
- Personal guarantee and whether it extends into a renewal
- Security deposit terms
For background, read types of commercial leases, how commercial rent works, NNN and CAM charges explained, and commercial lease terms that matter.
What a tenant rep does on a renewal, and who pays
A tenant rep reads your lease, flags deadlines, benchmarks rent against comparable deals and current availability, tours alternatives, and negotiates with your landlord, so you are not deciding with only the landlord’s numbers. On renewals the landlord commonly pays the tenant rep’s commission, but practices vary, so confirm who pays in writing before you start.
This guide is general information, not legal advice. For legal questions about your lease, consult a Texas real estate attorney.
Tristen Palori, a licensed commercial real estate agent, represents Austin tenants on renewals and relocations. See our lease renewal service for a free lease review, or contact us with your lease and expiration date.
FAQ
Frequently asked questions
When should I start negotiating my lease renewal?
Start 12 to 24 months before expiration. That leaves time to benchmark the market, tour alternatives, and still move if the landlord's terms are not competitive. Larger spaces and medical or restaurant uses need the longer end.
What is a blend-and-extend?
A blend-and-extend is an early renewal where the tenant adds years to the lease in exchange for a new rate that blends the remaining old rent with the new market rent. It can lower rent now if market rents have fallen or if the landlord values the longer commitment.
What happens if I stay after my lease expires?
You become a holdover tenant. Most commercial leases set holdover rent well above the last rent paid and may make you liable for the landlord's damages, such as a lost incoming tenant. Check your lease's holdover clause before relying on it.
Do I need a broker for a lease renewal?
You do not have to use one, but a tenant rep broker can benchmark your rent, show the landlord you have real alternatives, and negotiate terms you might not know to ask for. On renewals the landlord commonly pays the commission, so confirm that before you engage one.
Can I negotiate a renewal option that is already in my lease?
Yes. An option sets the terms you can lock in, not the only terms available. Many tenants use the option as a floor and negotiate better rent, concessions, or clauses, while keeping the right to exercise the option if talks stall.
Can I get out of my commercial lease early?
Only if the lease gives you an early termination right, or the landlord agrees to one. Termination usually requires notice and a fee to cover the landlord's unrecovered costs. Subleasing or assigning the lease may be alternatives.