This office lease clause provides the tenant with a right of first refusal if additional space becomes available within the building.
The New York Expansion Option Clause, also known as the expansion clause in a lease agreement, is a contractual provision that allows the tenant the right to expand their leased space within the same building or complex at a future date. This clause can prove to be highly beneficial for businesses that may anticipate growth or require additional space to accommodate their operations in the future. The New York Expansion Option Clause typically outlines the terms and conditions under which the tenant can exercise their right to expand. It specifies the timeframe within which the tenant can exercise this option, usually after a specified number of years or at predetermined intervals during the lease term. Additionally, it may include specific limitations on the expansion, such as the maximum percentage of additional space the tenant can occupy or the specific areas of the building or complex that they can expand into. There are different types of New York Expansion Option Clauses that can be tailored to suit the needs of each tenant and landlord. Here are a few examples: 1. Right of First Offer: This type of expansion option clause grants the tenant the first opportunity to lease any available space that becomes vacant within the building or complex before it is offered to other potential tenants. The tenant can choose to accept or reject the offer within a specified period, giving them priority over other parties interested in the space. 2. Right of First Refusal: Similar to the Right of First Offer, this clause provides the tenant with the right to match or better any legitimate offer made by a third party for additional space within the building or complex. If the landlord receives an offer, they must present it to the tenant, who then has the option to accept the same terms or negotiate more favorable terms to secure the available space. 3. Expansion at Market Rate: This type of expansion option clause allows the tenant to expand into additional space within the building or complex, usually at the prevailing market rate at the time of expansion. It ensures that the tenant will not face substantial rental rate increases beyond market norms when exercising their expansion rights. 4. Prenegotiated Expansion Terms: In some cases, tenants may negotiate specific terms for expansion at the time of signing the lease agreement. This can include predefined rental rates, predetermined expansion areas, or any other mutually agreed-upon conditions for future expansion. Having pre-negotiated terms can provide certainty and clarity for both parties involved. The New York Expansion Option Clause is a valuable provision for tenants and landlords alike, as it allows flexibility for growing businesses while providing the landlord with potential future occupancy and a higher tenant retention rate. By incorporating this clause into lease agreements, both parties can ensure a smoother and less disruptive expansion process.
