When Should You Start a Calgary Office Lease Renewal?

For many Calgary office tenants, the process should begin approximately 12 to 18 months before lease expiry.

Larger or more complicated requirements may require even more time.

Why so early?

A proper office strategy can involve market research, property tours, financial analysis, offer negotiations, lease negotiations, design, construction and, ultimately, the move itself.

Starting early does not mean deciding to relocate. It simply preserves that option. If a landlord knows that a tenant no longer has enough time to realistically move, the tenant’s negotiating position can change significantly.

Test the Market Before You Renew

Before accepting a renewal proposal, determine what comparable Calgary office space is available. Competing landlords may offer different net rental rates, free rent, tenant improvement allowances, turnkey construction or other incentives.

That information creates a benchmark against which your existing landlord’s proposal can be evaluated.

It also gives you alternatives.

This matters because a landlord generally understands that relocating an established business takes time and effort. A tenant with credible alternatives is negotiating from a very different position than one approaching its lease expiry without another option.

Has Your Office Requirement Changed?

A lease renewal is also an opportunity to reconsider how much office space your company actually needs.

Employee counts change. Hybrid work affects attendance. Companies reorganize departments, add collaborative areas or reduce private offices.

Office configuration can make a difference as well. A business occupying 10,000 SF today may discover that a better-designed 7,500 SF office meets its needs.

Conversely, a growing company may require additional space or expansion rights that its existing building cannot provide. The cost per square foot, therefore, shouldn’t be considered in isolation. A smaller office at a higher rental rate can sometimes produce a lower total occupancy cost than renewing a larger space at a lower rate.

Compare Total Occupancy Costs—not Just Rent

One of the biggest mistakes in a Calgary office lease renewal is comparing net rental rates alone.

Consider the complete economics of each alternative, including:

• Net rent
• Operating costs and property taxes
• Parking
• Free rent
• Tenant improvement allowances
• Construction costs
• Furniture
• Moving costs
• Other occupancy expenses

The condition of competing office space is particularly important.

An inexpensive office requiring substantial construction can ultimately cost more than a higher-rent turnkey space. Conversely, your existing office may have significant value because the improvements are already in place and there are no relocation costs.

A proper financial comparison should examine the cost over the entire proposed lease term.

What Else Should You Compare?

Economics are only part of the decision.

Location, employee commute, CTrain access, parking, Plus 15 connectivity, amenities, natural light and building management can all affect whether a renewal or relocation makes sense.

Future flexibility is also an important consideration.

Companies need to consider what their workplace needs will look like several years from now.

Can you expand in the building? Can you contract if your needs change? Is there flexibility to sublease excess space? Do the building and location support employee recruitment and retention?

The cheapest option today is not necessarily the most cost-effective option over the full lease term.

Renewal Can Still Be the Best Outcome

Testing the market doesn’t mean you need to move.

In many situations, renewing is the preferred outcome. Moving can be disruptive and expensive, and a tenant may already have an efficient office, good parking, a convenient location and a substantial investment in its existing premises.

The purpose of exploring alternatives is to make the renewal decision with confidence that you have all the information needed to make an informed decision.

If competing properties aren’t compelling, that information supports the decision to stay. If substantially better alternatives exist, you have the ability to pursue them—or use them to support negotiations with your existing landlord.

Get Tenant Representation Before Negotiating Your Renewal

CORE Commercial Real Estate represents commercial tenants in Calgary.

For a Calgary office lease renewal, we can evaluate your existing premises, work with you to determine your future space requirements, survey competing Calgary office opportunities, compare the financial terms and negotiate with your landlord.

Because CORE focuses on tenant representation, our role is to evaluate the transaction from the tenant’s perspective.

The key is to start before your options disappear.

If your Calgary office lease renewal is approaching in the next 12 to 18 months, that is the time to understand the market—even if you think you already know that you want to stay.

A good renewal strategy isn’t simply about negotiating a lower rental rate. It’s about determining the right amount of space, understanding the alternatives, calculating the complete economics and negotiating the flexibility your business may need during the next lease term.

Is Your Calgary Office Lease Coming Up for Renewal?

Don’t wait until your lease is close to expiry to find out what your options are. CORE Commercial Real Estate can review your current lease, assess your future space requirements and show you the competing office opportunities available in the Calgary market.

Whether you ultimately renew or relocate, understanding your alternatives gives you the information and negotiating leverage you need before entering discussions with your landlord.

Ready to Protect Your Business From Hidden Lease Costs?

If you’re entering a new lease, approaching a renewal, or preparing to vacate a space, now is the time to review your lease. Contact our Tenant Representation team for a complimentary lease review and find out exactly where you stand, before the landlord does.