Guide · Leasing · 2027
Before you renew in 2027, test the market
If your commercial lease ends in 2027, don’t renew on the first number. Tour real alternatives, compare them on net effective rent, then decide whether to stay or move.
For: Tenants renewing in 2027 · Businesses comparing stay vs move
General information, not tax or legal advice. Talk to your lawyer and accountant before you act. Numbers here are illustrative, not a quote on any property.
Two roads into a 2027 renewal
One road is renewing on the landlord’s first number. The other is testing the market first, then deciding. Same space, very different outcomes.
If your lease ends in 2027, the clock is already running. Notice deadlines often sit 6 to 12 months before the end date. Miss that window and your leverage drops fast. See the lease renewal checklist and the free renewal check.
How to test the market without burning bridges
- Pull your lease: renewal clause, notice date, how the new rent is set, and any demolition or relocation language.
- Ask for the last two years of additional rent (taxes, insurance and operating costs), not just the estimate.
- Tour two or three real alternatives in the same area and size band. Write down face rent, free rent, tenant improvement (TI) money and additional rent.
- Turn each option into net effective rent so the renewal quote and the move options sit on one page.
- Only then decide: renew, renegotiate, or move.
Why net effective rent matters more in 2027
Landlords often protect face rent because it supports the building’s value and financing. That means free months and TI allowances show up more often than a clean cut to the asking rent. If you only compare the headline number, you can pick the worse deal.
A simple way to say it: net effective rent = (total base rent over the term − free rent − TI allowance) ÷ (rentable area × years). Additional rent usually still applies during free base-rent months. Check the wording.
Example only, not a real client. Say your landlord quotes $32 /sf for a five-year renewal with no free rent. A nearby space asks $34 /sf with four months free and $15 /sf of TI. Once you spread the incentives, the new space can come in cheaper on a net effective basis, even though the face rent looks higher. Or the reverse. You only know after you do the math.
What to bring to the conversation
- Your current base rent and the last two years of additional rent.
- The renewal notice date and the clause that sets the new rent.
- Two or three competing options with net effective rent worked out.
- A clear list of what would make you stay: term, TI, parking, signage, early termination, or a rent step that matches your cash flow.
What I’d tell a friend
Don’t renew blind going into 2027. Test the market early, compare on net effective rent, and keep the relationship with your landlord polite the whole way. You may still stay. You’ll just stay on purpose.
Related: paying too much rent, triple net leases, renewal options, net effective rent.
Questions people ask
When should I start testing the market before a 2027 renewal?
Work backwards from your notice deadline. Many BC commercial leases need written notice 6 to 12 months before the end of the term. Start looking at alternatives a few months before that notice date so you have real options, not a rushed yes.
What is net effective rent?
Net effective rent is the average base rent you really pay per square foot per year after you subtract free rent and the tenant improvement allowance over the term. It lets you compare a renewal quote with a move-out offer on the same basis.
Does testing the market mean I have to move?
No. Often the point is to learn what your space is worth so you can renew on better terms. Sometimes staying is still the right call once you know the numbers.
Go deeper
Plain-English definitions with BC sources, from the encyclopedia:
Next step
Want a second set of eyes on your 2027 renewal?
Send the lease summary and the landlord’s quote. I can compare it with what’s available nearby.
Search