What is a rent concession?

A rent concession refers to an incentive provided by a landlord to encourage a tenant to sign a lease or renew an existing one. This can manifest in various forms, including offering free rent for a certain period, which allows the tenant to save money upfront. Additionally, it might include extra tenant improvement allowances, which can be funds allocated for renovations or upgrades to the rental space tailored to the tenant's specific needs.

Understanding this concept is important because rent concessions are often employed in competitive rental markets to attract tenants when demand is low or to motivate prospective tenants to sign a lease quickly. This strategy helps landlords maintain occupancy rates and can also make the terms of the lease more appealing to potential renters. Thus, identifying rent concessions accurately can significantly impact negotiations and financial planning for both tenants and landlords.