Our advisors have sat alongside thousands of leadership teams working through a commitment most companies face only once every five or 10 years, and one of the largest they will ever sign. After enough of those negotiations, patterns emerge. The industries may change, the buildings certainly change and the market cycles turn, but the counsel we give tends to circle back to the same handful of key truths.
We sent the same set of questions to our advisors across the country, expecting the answers to split by geography and by the kind of space involved. But they barely split at all. The same lessons came back phrased a dozen different ways. These are the ones we find ourselves repeating, and the ones we wish every leadership team understood before stepping into the market.
Start Earlier Than You Think
If our advisors could offer a company only one piece of advice, most of them would spend it here: start earlier than you think. Companies routinely begin their real estate process four to six months before a lease expires, which is precisely when they have the least room to maneuver. Starting 12 to 18 months out changes everything. That runway is what gives a company time to tour real alternatives, gather competing proposals and let the facts, rather than the calendar, drive the decision. Time is leverage.
The most common misconception we encounter is the belief that there is plenty of time to figure it out. Most companies have less than they think, because the useful part of the process happens long before anyone tours a building: defining what success actually looks like, pulling comparable transaction data and deciding what the company is willing to trade for what. Skipping that groundwork is what leaves a company negotiating on the landlord’s terms.
You Have More Leverage Than You Realize
Companies also routinely underestimate how much pull they have. Landlords need occupancy and net operating income, and a well-informed tenant with genuine alternatives carries real weight, particularly in a market with elevated vacancy across nearly every major office submarket.
Many companies also assume their lease is static, that nothing can be done until it expires. In reality, there are often opportunities to restructure early, reduce occupancy costs, expand, contract or sublease well before the expiration date. They also tend to underestimate the value they create for their landlords, and therefore how much of that value they are entitled to share in.
Rent is Rarely the Whole Story
Ask a company what matters most in a lease and the answer is almost always the rent. Understandable, though it usually means the rest of the economics get far less scrutiny than they deserve.
There’s an old notion that real estate is a company’s second-largest expense after payroll. In practice, that is rarely true. For a distribution or manufacturing company, rent can fall into the low single digits as a share of total costs. For an office tenant, it often lands somewhere between four and six percent. We’ve seen office clients whose executive travel and hotel costs for the year outran their rent. The transaction feels enormous because it arrives all at once, but as a share of annual cost it is seldom the giant it appears to be.
Chasing the lowest rate can quietly cost a company far more than it saves. A poorly located building, one in weak condition or under indifferent management, or one that does nothing for recruiting or the brand, can undermine everything the savings were meant to protect. “The goal isn’t to get the lowest price,” says Senior Executive Managing Director David Marino. “The goal is to get what you want at the lowest price.” Concessions, operating expenses, taxes, parking, tenant improvements, moving costs and downtime all belong in the math.
Be Careful What You Commit To
Some of the most expensive mistakes we see are made by the most sophisticated companies, and they tend to cluster around the length of the commitment. Signing a longer lease to capture a few extra months of free rent can feel like a win, but doubling a five-year commitment to 10 years for marginal gains is rarely worth it. When a space requires significant tenant improvements or capital, a longer term can make sense. Absent that, every year beyond five deserves hard scrutiny.
The life science sector today is full of companies still paying for 10-year leases signed against growth plans that never materialized. Senior Managing Director Will Tober frames it as a question worth asking up front: “How long will this space meet my needs?” The answer, he notes, comes down to planning ahead. “If you’re thinking about expansion and contraction scenarios up front, you can build the appropriate flexibility and optionality into your lease.”
A related habit is the reflexive exercise of renewal options. These options are defensive by nature, and negotiating as a free agent, outside their parameters, almost always produces a better outcome. A renewal option is worth exercising only when the option terms beat what you could negotiate on the open market, or if the landlord wants your space for another tenant or use.
Create Competition, Even When You Plan to Stay
Companies often negotiate solely with their current landlord, even when renewing is the likely path. “Evaluating credible alternatives gives tenants leverage and almost always results in a better renewal deal,” Managing Director Austin Lashley points out. Credible means a real proposal from a competing building, priced and dated. It never has to be the space you choose, but it does have to be one you would actually sign.
The Advice Nobody Wants to Hear in the Moment
Some of our most valued counsel is the counsel clients least want at the time. Now and then, that means telling a company we don’t think a transaction is right for them, even one they have fallen for. A beautiful, extensively built-out space might call for a seven- to 10-year commitment when the stability of the business warrants something shorter. Executive Managing Director Owen Rice has had that conversation more times than he can count. Clients who walk away and land somewhere better tend to offer some version of, “I’m glad you didn’t let me force that one.”
There is one more piece almost no one wants to hear: signing the lease doesn’t mean the work is done. Someone has to track critical dates, confirm the tenant improvements are delivered on time and on budget, make sure free rent is honored and hold operating expense caps to what was negotiated. The language around operating and capital expenses, easy to gloss over during negotiations, can carry major financial consequences across the full term.
Treat Your Advisor as a Partner
If there is a thread running through all of it, it’s this: the companies that get the most from the process are the ones that treat their advisor as a true partner. For Executive Managing Director Alex Musetti, it comes down to candor. “The clients who explain their thinking out loud often see the best results.” The more we understand about where a company is trying to go, the better we can advise on how to get there.
What ties these lessons together is a single conviction: that a company is best served by an experienced advisor who sits on its side of the table. Hughes Marino only represents users of commercial real estate, so our advice answers to one interest alone: the company signing the lease.
These lessons are what that focus produces across three decades of negotiations. For any leadership team about to enter the market, the advantage is not any single tactic on this list. It is having an advocate in your corner whose only job is to work for you.
