As a lease nears expiry, most businesses default to renewing. Staying put avoids the cost and disruption of a move, and the building already works — mostly. But "mostly" can be expensive. The decision to renew or relocate deserves a real comparison, not a gut call.
The case for renewing
- No moving cost or downtime. Relocations carry real expense and operational risk.
- Known quantity. You already understand the building, the landlord, and the neighbourhood.
- Negotiating leverage — if you create it. In a softer market, a landlord facing a potential vacancy will often sharpen terms to keep a good tenant.
The case for relocating
- The building no longer fits. Clear height, power, dock count, or layout may be capping how efficiently you operate.
- The market has moved. In a tenant-favourable market, a better building may be available at a comparable or lower all-in cost.
- Growth or contraction. Your space needs in three years may look nothing like today's.
How to run the real numbers
The honest comparison weighs the full economics of both paths over the same term:
- All-in occupancy cost — net rent plus TMI plus escalations, year by year, for each option.
- One-time costs — moving, fit-out, downtime, and IT/equipment relocation for the move scenario.
- Incentives — free rent and improvement allowances a new landlord may offer that an incumbent won't.
- Operational value — what better clear height, power, or dock access is actually worth to your throughput.
The most powerful renewal tool is a credible relocation alternative. Even if you stay, running the comparison usually pays for itself.
Start the comparison early
This analysis takes time to do well — ideally 12 to 18 months before expiry. Start late and you lose leverage; the landlord knows you can't realistically move. Start early and both options stay genuinely open. That's the position you want to negotiate from.
This article is general information and not advice for your specific situation. Cost estimates vary by building, term, and market conditions.