Beyond the rent, a tenant should negotiate the tenant improvement allowance, free rent, the term and renewal options, annual escalations, assignment and sublease rights, limits on any personal guarantee, operating expense caps, early termination and holdover terms, and, for retail, exclusive use, signage and parking. Together these terms often shape total cost and risk more than the rate.
Rent is the number everyone watches, but a lease is a multi-year contract, and the clauses around the rent decide how flexible, how expensive and how risky those years will be. Demand for good space here is real: Dallas-Fort Worth landed 11 of 164 U.S. headquarters relocations in 2025, the most of any city (Bisnow, citing CBRE, 2026), and Goldman Sachs is building an 800,000-square-foot Dallas campus targeted to open in early 2028 (Goldman Sachs, reported by Fox Business, 2026).
Which money terms matter most besides the rate?
How much tenant improvement allowance should I ask for?
A tenant improvement (TI) allowance is money the landlord contributes toward building out your space, usually quoted per square foot. In office and medical leases it is often the largest single concession, and it tends to grow with term length and tenant credit. Get a contractor's estimate before you negotiate, then pin down:
- The amount, and whether it covers your actual build-out cost
- What it can pay for: construction only, or also design, permits, cabling, signage and furniture
- Whether unused allowance can be applied to rent
- The deadline to spend it
Is free rent worth negotiating?
Yes. Abated rent at the start of the term covers the overlap while you build out and still pay at your old location. Clarify whether abatement covers base rent only or operating expenses too, and whether the landlord can claw it back if you later default.
How should rent escalations be structured?
Most leases raise rent each year by a fixed percentage or a fixed dollar step. Compare proposals on total rent over the full term, since a lower starting rate with steeper annual increases can cost more in the end.
What about operating expense caps?
If you pay a share of operating expenses, ask for a cap on annual increases in controllable costs and a clear list of exclusions, such as capital improvements, leasing commissions and the landlord's financing costs. Taxes and insurance are usually outside the cap. That matters in Texas, where the 20% appraisal cap on non-homestead property valued at about $5.32 million or less expires December 31, 2026 (Texas Tax Code 23.231). Our post on what happens when that cap expires explains why some smaller buildings could see higher taxes in 2027.
How should I think about the term and renewal options?
Longer terms typically earn more allowance and free rent, but they lock you in. A renewal option gives you the right, not the obligation, to extend at a defined rent, often fair market value. Negotiate the number and length of options, how fair market rent is determined and whether it can fall, and the notice window. Calendar that window the day you sign, because missing it can forfeit the option.
What flexibility should I build into the lease?
Assignment and sublease rights. Plans change. Ask that the landlord's consent to an assignment or sublease not be unreasonably withheld, conditioned or delayed, and that transfers to an affiliate or a buyer of your business be allowed without consent. Watch for recapture clauses that let the landlord take the space back, and for profit-sharing on sublease income.
Early termination. A termination option lets you exit after a set number of years by giving notice and paying a fee, usually the unamortized allowance and commissions plus some months of rent. It costs something up front, but it can be valuable when growth is hard to predict.
Holdover. If you stay past expiration without a new agreement, holdover rent often jumps to a multiple of your last rent, and you may owe the landlord's damages. Negotiate a gentler rate for the first months and a limit on consequential damages, so a construction delay at your next space does not become a crisis.
How can a small business limit a personal guarantee?
Landlords often ask owners of smaller or newer businesses to guarantee the lease personally. You may not be able to avoid one, but you can usually shape it:
- Cap the guarantee at a dollar amount or a number of months of rent.
- Have it reduce or end after a period of on-time payments.
- Limit it to the period until you vacate, return the keys and give proper notice.
- Offer a larger security deposit or a letter of credit in its place.
What should retail tenants add?
Retail leases carry their own priorities:
- Exclusive use. A clause barring the landlord from leasing nearby space in the center to a direct competitor.
- Signage. Building, pylon or monument sign rights, and who pays for them.
- Parking. Ratio, location near your entrance, and limits on the landlord changing the layout.
- Co-tenancy. Rent relief if key anchors leave the center.
Why should an attorney review the lease?
A broker negotiates business terms. An attorney negotiates legal risk. Have a Texas real estate attorney review indemnity, default and cure periods, casualty and condemnation, relocation clauses and guaranty language before you sign, and confirm the terms in your letter of intent were carried into the lease correctly. The Agency Dallas Commercial Division negotiates commercial lease terms for tenants across Dallas-Fort Worth and works alongside your attorney from letter of intent to signature.
How can our Commercial Division help?
If a lease proposal is on your desk, or your renewal is coming up, send us the property type, the location and the size of space or budget involved. We will follow up within one business day with a review of the terms worth pushing on before you sign. The Agency Dallas Commercial Division represents office, retail and industrial tenants throughout North Texas. Start on our Commercial Division page or call (469) 839-6020, and see our market reports for broader context.
Frequently asked questions
Is the tenant improvement allowance negotiable?
Usually, yes. The allowance depends on the condition of the space, the landlord's goals, your credit and the length of the lease. Longer terms generally support larger allowances because the landlord has more time to recover the cost. Get a detailed construction estimate first, so the allowance you request reflects what your build-out will actually cost.
What is a renewal option?
A renewal option gives the tenant the right, but not the obligation, to extend the lease for an added term at a rent set by a formula or by fair market value. It must be exercised by written notice within a window stated in the lease. Missing that deadline can forfeit the option, so calendar it the day you sign.
Can I avoid signing a personal guarantee?
Sometimes. Established businesses with strong financials may lease without one. Newer or smaller businesses can often limit a guarantee instead: cap it at a set amount, let it decline over time, restrict it to the period until you vacate, or substitute a larger deposit or a letter of credit. An attorney should review any guarantee before you sign it.
What happens if I need to move out early?
Without an early termination right, you generally remain responsible for rent through the end of the term, subject to the lease. Common paths out include negotiating a buyout with the landlord or subleasing or assigning the space if the lease allows it. Negotiating a termination option and fair transfer rights at the start costs far less than solving the problem later.
Do I need both a broker and an attorney?
They do different jobs. A tenant representative surveys the market, creates competition among landlords and negotiates business terms such as rent, allowance and free rent. An attorney reviews and negotiates the legal language that allocates risk, including guarantees, defaults and indemnities. Many tenants use both, and in most leases the landlord pays the tenant representative's commission.
Sources
- Bisnow, citing CBRE, 2025 U.S. headquarters relocations (2026)
- Goldman Sachs Dallas campus, reported by Fox Business (2026)
- Texas Tax Code Section 23.231, limitation on appraised value of certain non-homestead real property
Verified October 2026.
