What Are Concessions in Real Estate and How Can I Get More in a High-Vacancy Market?
When negotiating a commercial lease—whether for office, warehouse, manufacturing, medical, or retail space—understanding what are concessions in real estate can mean the difference between an average deal and a great one.
Concessions are incentives offered by landlords to attract or retain tenants. In markets where vacancy is high or competition for tenants is strong, concessions can dramatically improve the economics of your lease. Knowing how to identify, quantify, and negotiate them is a powerful advantage.
What Are Concessions in Real Estate?
In simple terms, concessions in real estate are financial or contractual benefits a landlord offers to make a lease more attractive. These can include:
- Free Rent: A period of rent abatement at the start of the lease.
- Tenant Improvement Allowance (TI): Funds provided by the landlord to customize or build out the space.
- Reduced Escalations: Limiting or delaying annual rent increases.
- Early Occupancy: The ability to move in before rent begins.
- Relocation or Renewal Incentives: Credits or perks for existing tenants renewing their leases.
Landlords use concessions to compete for quality tenants, offset weaker market demand, or incentivize longer-term commitments.
How Market Conditions Affect Concessions
Concessions are closely tied to market dynamics. In a high-vacancy market—often caused by economic slowdowns, oversupply, or new construction—landlords must compete harder for tenants. The higher the vacancy, the greater your leverage.
However, the opportunity varies by property type.
- Office: High vacancy can yield longer free-rent periods and larger TI packages.
- Warehouse & Manufacturing: Concessions may include phased rent or infrastructure upgrades.
- Medical: Landlords might offer build-out contributions for compliance or specialized installations.
- Retail: Rent discounts or percentage-rent adjustments are common incentives for tenant retention.
Knowing the vacancy rate, absorption trends, and demand drivers for each property type allows tenants to tailor their strategy for maximum leverage.
How Keyser Helps Clients Maximize Concessions
Keyser’s conflict-free, occupier-only model ensures that all negotiation strategies focus entirely on the tenant’s best interests. Because the firm never represents landlords, there are no competing incentives or obligations that could limit how aggressively concessions are pursued.
Keyser’s advisors start by analyzing current market conditions, comparing concessions across multiple properties, and identifying where landlords have flexibility. Then, using proprietary market analytics and predictive modeling, they determine which combination of rent, TI, and term length creates the strongest total value for the client.
AI-Enabled Insights for Smarter Negotiations
Keyser is AI-enabled, using artificial intelligence and real-time data to analyze rent trends, vacancy rates, and concession packages across regions. This technology identifies patterns in landlord behavior—revealing where incentives are increasing and which submarkets offer the most negotiable terms.
For example, AI can highlight that office landlords in high-vacancy downtowns are offering extended free rent, while warehouse owners in suburban markets are focusing on TI contributions or early occupancy. With this intelligence, Keyser’s clients enter negotiations equipped with concrete data and a clear strategy to secure optimal terms.
Global Reach, Local Advantage
With over 600 professionals and international partners worldwide, Keyser combines global scale with local expertise. The firm manages lease negotiations across continents, helping clients in every market type—from medical and retail to industrial and corporate office—capitalize on current vacancy trends.
Because Keyser’s representation is conflict-free, clients benefit from pure advocacy and transparent deal comparisons that lead to better results.
Turn Market Conditions Into Opportunity
High vacancy doesn’t just create uncertainty—it creates leverage. When you understand what are concessions in real estate, you can transform market softening into strategic advantage.
With AI-driven analytics, global reach, and a conflict-free model, Keyser empowers tenants across all industries to negotiate stronger, smarter, and more flexible leases—turning landlord incentives into lasting business value.
Frequently Asked Questions:
Q: What are common types of lease concessions in commercial real estate?
A: Lease concessions are financial or operational incentives that landlords offer to attract or retain tenants. The most common include free rent, tenant improvement (TI) allowances, moving credits, reduced parking costs, or flexible renewal terms. In a high-vacancy market, these incentives tend to increase as landlords compete to fill space—creating stronger negotiation opportunities for occupiers.
Q: How can tenants use market conditions to negotiate better concessions?
A: When vacancy rates rise, tenants gain leverage. By benchmarking competing properties, running a competitive proposal process, and extending negotiation timelines, tenants can push for larger TI allowances, longer rent abatements, and greater flexibility in lease structure. Keyser uses real-time market data and landlord-side intelligence to quantify leverage and secure value well beyond face rent reductions.
Q: Why does working with a tenant-only broker help increase concessions?
