Commercial Lease Renewals in Texas: What to Do 12 Months Before Your Lease Ends
Most renewal leverage is lost by waiting. Whether you're the tenant or the landlord, here's the timeline that keeps your options open, what to check in the lease first, and the terms worth negotiating besides rent.
The renewal conversation usually starts too late. A tenant realizes the lease ends in three months, there isn’t time to find and build out another space, and the landlord knows it. Or a landlord waits for the tenant to call, and learns at 60 days that the tenant has signed somewhere else.
Twelve months out is the right time to start. Here’s what to do at each stage, from either side of the table.
Twelve months out: read the lease
Before anyone talks numbers, pull the lease and every amendment and find these:
The expiration date. The real one, from the last amendment, not the one everyone remembers.
Renewal options. Many leases give the tenant one or more options to renew. Note how the rent is set for the option term, whether it’s a fixed increase, a percentage of market, or market as determined by some process.
The option notice deadline. This is the date that matters most. Options often must be exercised in writing a set number of months before expiration, and a missed deadline can mean the option is gone. Put it on the calendar with a reminder well ahead.
Holdover terms. What the tenant pays if it stays past expiration without a new agreement. Holdover rent is often set well above the current rent, which gives the landlord leverage late in the process.
Restoration and move-out obligations. What the tenant has to remove or repair if it leaves. That cost belongs in the tenant’s comparison.
Nine months out: check the market
Tenants should find out what comparable space actually leases for, what concessions landlords are offering, and what it would cost to move: new build-out, moving, downtime, new signage and IT.
Landlords should know the same comps, plus their own costs of losing the tenant: months of vacancy, the build-out a new tenant will ask for, leasing commissions, and the risk of a long lease-up.
A renewal is a negotiation between two parties who each have a cost if they walk away. The side that has measured its own costs and the other side’s negotiates better.
Six months out: open the conversation
By now the tenant should know whether it wants to stay, and the landlord should know whether it wants to keep the tenant. If both answers are yes, start talking.
If you’re a tenant with a renewal option, you can use the option as a floor while you negotiate for better terms. If you’re a landlord, a renewal proposal sent early, before the tenant tours other buildings, often keeps a good tenant on fair terms.
What to negotiate besides rent
Rent is the headline, but a renewal can fix a lot more:
Improvements. A renewal is a good time for new paint, carpet, HVAC work or a refresh, handled as a landlord-paid allowance or as landlord work.
Free rent or reduced rent at the start of the renewal term.
Expense structure. In an NNN lease, check how the expenses are calculated and whether a cap on controllable expenses makes sense for both sides.
Term and flexibility. A longer term in exchange for better economics, or a shorter term with a new option.
Assignment and subletting. Updating these rights matters if the tenant might sell its business.
Cleanup of old problems. Parking, signage, after-hours HVAC, access, or language from the original lease that no longer fits how the space is used.
Get it in writing, on the right form
Renewals and extensions should be documented in a written amendment that both sides sign, using the same form family as the original lease where possible. If the original was a TXR commercial lease, a TXR amendment keeps the documents consistent.
If the renewal changes anything beyond term and rent, have a real estate attorney review the amendment. It costs far less than a dispute over what was agreed.
For landlords with several tenants
If you own a multi-tenant building, put every expiration, option deadline and notice date in one place, and review it every quarter. Staggered expirations protect the building from losing several tenants at once, and early renewal talks keep occupancy steady.
If you’re a tenant or landlord with a lease ending in the next year in Williamson County, contact me. I’ll read the lease with you, pull the comps, and lay out the options before the deadlines decide for you. For the leasing basics, see NNN Leases Explained and LOI Red Flags.