How it works
Most commercial leases contain several dated events. At expiry the lease ends unless it is renewed. A break option lets the tenant end the lease early, usually on notice and subject to conditions. A renewal or extension option lets the tenant stay on agreed terms, and a rent review resets the rent. Where they exist, expansion and contraction rights let the tenant take or give back space.
Each event has a notice deadline that comes well before the event itself, and missing it usually means losing the option. Real estate teams keep a schedule of every event across the portfolio, with the notice deadline, the conditions and the space affected.
The work happens before the notice deadline. Teams gather occupancy evidence, model scenarios such as renew, shrink, consolidate or relocate, and prepare the moves or restack each option would need. The decision then takes effect at the lease event, when the organization can actually act on it.
Examples
- A break option on one floor of a three-floor lease lets a company hand back that floor after a restack concentrates its teams on the other two.
- Lease expiries at two city offices prompt a scenario that compares renewing both with consolidating into one.
- A rent review becomes a stronger negotiation when occupancy data shows the tenant could credibly take less space.
Common mistakes
- Starting too late, so there is no time to collect evidence, model options or run a restack before the notice deadline.
- Missing break conditions, such as vacant possession or reinstatement obligations, which can make the break invalid.
- Deciding on headcount alone, without measured attendance and peak-day demand.
- Counting on sublease income as a certain saving when the market may not take the space.
How Kadence helps
Kadence gives teams occupancy evidence ahead of a lease event and a way to test the options. Workplace Insights shows attendance, occupancy and heatmaps by building and floor. SpaceOps scenario planning compares options such as renewing, shrinking or consolidating, and guided workflows help consolidate floors or restack a building so the chosen option is ready before the notice deadline.
Scenario planning · Workplace analytics · Office space planning guide
Frequently asked questions
What is a break clause in a commercial lease?
A break clause, or break option, lets a tenant or landlord end a lease early on a set date, usually after serving notice by a deadline and meeting conditions such as paying rent in full and giving vacant possession. Missing the notice deadline or a condition usually means the break cannot be used.
How far ahead should you plan for a lease event?
Plan back from the notice deadline, not the event itself. Teams need time to collect several months of occupancy data, model scenarios, win approval and, if the decision is to shrink, carry out a restack or move. Large portfolios keep a rolling schedule of every event.
What is the difference between a lease expiry and a lease renewal?
An expiry is the date the lease ends. A renewal extends the tenancy, either through an option in the existing lease or through a newly negotiated lease. Both are lease events, because each is a point where the organization decides how much space it needs.
What data supports a lease event decision?
Measured attendance and occupancy by building and floor, peak-day demand, headcount forecasts, occupancy cost and the lease terms themselves. Together they show how much space the organization really needs and what each option would cost.
Related terms
- Scenario planning Modeling several possible futures for space, cost and teams, and comparing them side by side before committing to one.
- Sublease Letting leased space you no longer need to another party, while staying responsible to the landlord under the original lease.
- Real estate portfolio optimization Matching the buildings, floors and leases an organization holds to the space its people actually need.
- Office right-sizing Matching the amount and type of office space to how people actually use it, based on measured demand rather than headcount.
- Office consolidation Moving teams from several floors, buildings or sites into less space, then giving up or repurposing the space that is freed.
- Stay vs go decision The choice, ahead of a lease event, between staying in a building (and possibly reconfiguring it) or relocating.
Kadence editorial team · Last reviewed