That is why the renegotiation of a lease agreement should begin well before the first meeting with the landlord. The tenant needs time to research the market, consider alternative scenarios, and assess whether remaining at the current location still makes business sense. For large spaces—over 10,000 square meters—preparations may need to begin as much as 3–4 years in advance. A longer lead time is particularly important when relocating to a new development is being considered or when the preferred property is located in downtown Warsaw, where the availability of large spaces in modern office buildings remains limited.
When should you begin renegotiating a lease agreement?
For most office spaces, preparations should begin about 12–18 months before the lease expires. A large office, a costly fit-out, or a complex relocation may require even more lead time. This timeline allows you to gather offers from the market and compare them with your current lease. It also gives you time to assess whether your company still needs the same amount of space, the same location, and a lease term of similar length. The closer you get to the end of the lease, the shorter the list of options becomes. When moving is no longer a viable option, the landlord has fewer reasons to make significant changes to the terms.
The contract is still in effect, but the office no longer suits the company
The lease expiration date doesn’t have to be the only reason to start a conversation. Over the course of a multi-year lease, the team structure, work model, scale of operations, and use of space can all change.
A reason for renegotiation may be a situation in which:
- some of the space remains unused on a regular basis,
- The company is growing and needs more space,
- the cost of office space differs from the rates available in comparable buildings,
- Indexation has clearly raised the rent,
- the space needs to be modernized or refitted,
- The company needs more flexibility regarding subleasing, assignment, or early termination.
Any change to the terms during the term of the lease requires the agreement of both parties. The tenant can therefore combine their expectations with a proposal that is attractive to the landlord, such as extending the lease, occupying more space, or making an early decision to remain in the building.
Renegotiating the rent? That’s just the beginning
The price per square meter is the most obvious part of the offer, but it doesn’t say much on its own about its actual value.
The cost of rent is also affected by:
- rent-free periods,
- the owner’s share of the fit-out costs,
- indexing rules,
- maintenance fees,
- the term of the new obligation,
- break option,
- the option to sublease and assign,
- the right to expand or reduce the area,
- Scope of restoration work during the move.
A few months of rent relief can have a greater financial impact than a small adjustment to the base rate. The same applies to fit-outs: with a larger space, the landlord’s share of fit-out costs can significantly alter the economics of the entire lease. However, the benefits of renegotiation are not limited solely to cost savings. Equally important may be limiting the rent indexation rate (Cap Rate) or achieving greater flexibility in the terms, such as the ability to terminate the lease early (break option), an expansion option, or the right of first refusal (ROFR) for additional space. Therefore, it is worth considering renegotiation both in terms of total leasing costs and the ability to adapt the office to the company’s changing needs.
Other benefits of renegotiation may include a cap on rent adjustments or greater flexibility in the lease, such as a break option, an expansion option, or the right of first refusal (ROFR) for additional space. It is therefore worth considering not only the costs but also the ability to adapt the office to the company’s future needs.
Stay, move, or choose a more flexible option?
A tenant who knows their options negotiates with the landlord from a position of strength. This doesn’t mean you have to start planning a move. However, you need to know what spaces are available, under what terms they can be leased, and how much it would cost to relocate.
When deciding whether to renew a lease, it is a good idea to compare the terms offered by the current landlord with realistic alternatives available on the market. Savills supports tenants both in the processes of renegotiating and extending leases, as well as in relocating to new offices. Such a comparison helps assess whether remaining in the current building is justified in terms of costs, space quality, and the company’s needs. The choice is not always limited to renewing a traditional lease or relocating to another office building. Companies that need greater flexibility or do not want to make a long-term commitment may consider flex space.
What should you check before talking to the landlord?
The range of issues worth reviewing before renegotiating an office lease depends primarily on the property’s location and the situation in the specific building. The terms of a lease are negotiated differently in downtown Warsaw than outside the city center. The occupancy rate of the office building is also a factor—in a building with a large amount of vacant space, there may be more room for negotiation than in a building that is nearly fully occupied. Average office rent rates in Warsaw alone are not sufficient to assess the situation—what matters most are the realistic alternatives available in a given location.
Regardless of these circumstances, before speaking with the landlord, it’s a good idea to consider three areas:
- The terms of the current lease—including deadlines, indexation rules, early termination options, subleasing, and changes to the leased space—may have a direct impact on the scope of negotiations.
- Total cost of the occupied space—the analysis must take into account rent, maintenance fees, parking, fit-out costs, and any potential modernization expenses.
- Comparable market offers—the most useful are those for buildings that could actually serve as alternatives to the current headquarters. Key factors include financial terms, quality, fit-out costs, and availability dates.
Such a comparison makes it possible to assess whether the terms offered by the current landlord are in line with market conditions.
When renegotiating a lease, it’s easy to focus on the rent, even though many other factors determine the value of the agreement. For one company, the most important factor might be the budget for fit-out; for another, the ability to reduce the space or the option for early termination. A lot also depends on when negotiations begin. When a tenant has time to explore other buildings and evaluate relocation scenarios, their position is much stronger. The decision to remain in a given property should be based on a comparison of specific alternatives, not on the pressure of an approaching lease expiration.
Q&A
How far in advance should you begin renegotiating a lease agreement?
It’s a good idea to start discussions a dozen or so months in advance—ideally 12–18 months before the end of the lease for standard-sized spaces. However, if you need a large space (10,000 square meters or more), are considering a relocation, or have preferences regarding an attractive location (e.g., in downtown Warsaw), it is advisable to start the process as early as 3–4 years in advance.
Is it possible to renegotiate a lease agreement before it expires?
Yes. The terms of the lease can also be changed during the term of the agreement if both parties agree. The reason may be a change in space requirements, a planned office renovation, or a decision to extend the lease for another term.
What else can be negotiated besides rent?
Discussions may cover rent, rent-free periods, the budget for interior design, indexation rules, maintenance fees, subletting options, early termination, and increases or decreases in the occupied space.
What strengthens a tenant’s position in negotiations?
Time and access to viable alternatives are the tenant’s main advantages. When a company has the option to either remain in its current office or move to another location, negotiations are based on concrete possibilities rather than the pressure of an approaching lease expiration date. However, the alternative space must meet the company’s needs, both in terms of size and when it becomes available. For large offices in downtown Warsaw, the selection may be limited, which further underscores the importance of conducting a market analysis well in advance.
I would add that the alternative must also be feasible in terms of floor space and when it will become available. With large offices in downtown Warsaw, the selection may be limited, which is why it’s so important to research the market well in advance.
