Your Lease Expires in Two Years. Are You Already Late?

The expiration date may be years away. The decisions that determine whether you have real options start much earlier.

Originally published July 2012. Updated October 2026 to reflect current owner-side lease planning and capital project considerations.

Entering a new commercial lease can be exciting. Renewing an existing one can feel considerably simpler.

That simplicity can be misleading.

When an owner or tenant looks at a lease expiration two years away, it can feel like there is plenty of time. But the expiration date is the deadline by which a series of interconnected decisions may already need to be complete.

Before deciding whether to stay or move, the organization may need to understand its future space requirements, evaluate the existing location, test the market, compare alternatives, negotiate business terms, develop budgets and schedules, complete design, obtain approvals, construct the space and relocate the business.

That is a very different clock from the one printed on the lease.

How Much Time Do You Really Have?

There is no universal rule that says every company should begin exactly 18, 24 or 36 months before expiration.

A small office with straightforward requirements may have considerably more flexibility than a large headquarters, specialized facility or operation with significant infrastructure requirements.

The better question is:

How long would it take us to execute a credible alternative if we decided not to renew?

That is the schedule that matters.

If relocating would require 24 months from initial planning through occupancy, waiting until 12 months before expiration changes the options available to you. The landlord may also understand that there is no longer enough time for you to execute a realistic relocation.

Preserve the Ability to Say No

The strongest negotiating position is created before you reach the negotiating table.

It comes from having viable alternatives.

If the existing landlord knows the tenant has enough time to evaluate other buildings, negotiate another lease, design and construct the space and actually move, the possibility of leaving is credible.

If everyone knows there isn’t enough time, the renewal conversation is different.

That doesn’t mean a tenant should threaten to relocate or manufacture leverage. Management should preserve enough time to make a genuine business decision.

Start With the Business

An early lease review shouldn’t immediately become a real-estate search.

First ask what the organization will need when the current lease expires.

Has headcount changed? Has hybrid work changed utilization? Are there operational requirements the existing space no longer supports? Is the location still right for employees and customers? Are major capital improvements approaching? Does the building infrastructure support the organization’s future requirements?

The answer may ultimately be to stay exactly where you are.

That conclusion is much more valuable when it results from an evaluation made while other choices were still available.

Work Backward From Occupancy

Instead of asking, “When should we call a broker?” build the decision schedule backward from the date the business must be operational.

Depending on the project, that schedule may need to accommodate:

Business requirements → market evaluation → alternatives → financial comparison → lease negotiations → programming and design → approvals and permits → procurement → construction → technology and furniture → commissioning → move and occupancy

Some activities can overlap. Others cannot.

The schedule also needs contingency because real projects rarely move through every decision exactly as planned.

A lease that expires in 24 months can therefore represent considerably less than 24 months of actual decision time.

Test the Schedule Before You Need It

When someone says, “We don’t have to worry about the lease yet,” I would ask to see the schedule behind that conclusion.

• When does the stay-versus-move decision need to be made?
• How long would a realistic relocation take?
• When would negotiations need to begin?
• How much time is available for design, approvals and construction?
• What happens if one of those assumptions slips by three months?

Those questions reveal whether the organization really has time or simply has a distant expiration date.

Don’t Let the Existing Lease Make the Decision

Starting early doesn’t commit the organization to moving.

It gives management enough time to determine whether staying, relocating, expanding, contracting or restructuring the occupancy makes the most sense.

The objective is to reach the decision while the alternatives are still executable.

Once the schedule eliminates those alternatives, the lease may effectively have made the decision for you.

Leadership Takeaway: Manage a lease expiration as the end of a decision schedule. Starting early preserves options, negotiating leverage and the ability to make the real-estate decision based on the needs of the business rather than the remaining time on the clock.