Commercial Leases in a Shifting Market: Tips for Landlords and Tenants in 2025

As the commercial real estate landscape continues to shift in 2025, both landlords and tenants are finding themselves in uncharted territory. Economic uncertainty, changing demand for office and retail space, and the continued rise of hybrid work have transformed how businesses approach leasing agreements. Whether you’re leasing out space or preparing to sign a new lease, understanding your legal rights — and potential risks — is essential.

Here’s what both landlords and tenants should consider when navigating commercial leases in today’s evolving market:

1. Flexibility Is In — But It Needs to Be Clear

Businesses today are looking for flexibility in lease terms: shorter lease lengths, early termination clauses, and the ability to scale up or down depending on market conditions. Landlords are responding — but flexibility must be balanced with clarity.

What to consider:

• Early termination provisions: Define specific conditions and notice periods.

• Expansion or contraction options: Clearly outline how and when additional space can be added or downsized.

• Subleasing rights: Make sure you understand (or control) who can occupy your space if subleasing becomes necessary.

2. Escalation Clauses Are Back in Focus

With inflation still affecting operating costs and property taxes, landlords are increasingly relying on rent escalation clauses to protect their bottom line. These provisions automatically increase rent over time — but they’re often overlooked or misunderstood.

Tip: Tenants should understand exactly how increases are calculated (e.g., fixed percentages vs. CPI-based) and when they apply. Landlords should ensure these clauses are enforceable and clearly communicated.

3. Operating Expenses and CAM Charges: Don’t Gloss Over the Details

Common area maintenance (CAM) fees and shared operating expenses can be a major source of tension. In uncertain markets, disputes often arise when these costs fluctuate unexpectedly.

Best practice: Both parties should review expense pass-through provisions carefully. Tenants should ask for caps on CAM increases or detailed annual reconciliations. Landlords should be transparent in how costs are allocated and billed.

4. Force Majeure and Business Interruption Clauses Matter More Than Ever

After the unpredictability of recent years, both landlords and tenants are paying closer attention to what happens when operations are disrupted due to events beyond their control — such as pandemics, natural disasters, or government shutdowns.

Look for:

• Whether rent abatement is available during interruptions

• Who bears responsibility for insurance coverage

• The specific language and scope of any “force majeure” provision

5. Legal Review Is Essential — Not Optional

In 2025, commercial leases are more complex than ever, and small oversights can lead to big problems down the line. A contract lawyer with real estate experience can help you:

• Spot red flags

• Negotiate more favorable terms

• Ensure compliance with local laws and industry standards

Whether you’re a property owner trying to protect your investment or a tenant looking for a space that works long-term, legal guidance can offer peace of mind and prevent costly disputes.

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The commercial lease market is evolving rapidly — and that means the old “standard lease” just doesn’t cut it anymore. Tailored, thoughtful lease agreements are critical in today’s climate, especially when both parties need predictability and protection.

At Mastrantonio & Orlando, LLP, we help business owners, investors, and landlords structure strong, clear leases that support their long-term goals. If you're considering a new lease or have questions about an existing agreement, we're here to help. Contact our office today to schedule a consultation.