CRE glossary
Holdover
Holdover refers to a tenant remaining in possession of the premises after the lease term has expired without a new lease in place. Most leases impose a steep rent premium during holdover, typically 150–200% of the most recent base rent, and convert the tenancy to month-to-month so the landlord can terminate on 30 days' notice.
Holdover is expensive on purpose. Landlords want a strong financial incentive for tenants to either renew (with a new lease) or vacate (so the landlord can re-lease). 200% holdover rent makes both choices clearly preferable to staying without a deal. From the tenant's side, holdover is sometimes unavoidable when a renewal negotiation drags on or a relocation construction delays.
Modern leases distinguish between 'consensual' and 'non-consensual' holdover. Consensual holdover (landlord knew, accepted rent) typically caps at 125–150% of base rent because the landlord effectively agreed. Non-consensual holdover (tenant just stayed) can run to 200% or more. Push for the consensual structure as default, and require the landlord to give written notice before triggering the premium.
Holdover provisions matter most in the last 6 months of the term. If you're negotiating a renewal, get a written letter of intent extending the existing lease month-to-month at current rent during the negotiation, that prevents the holdover trigger from kicking in. If you're relocating, build a 60-day buffer into your construction schedule because nothing ever finishes on time.
Example
- Lease expiration
- March 31, 2026
- Tenant's last base rent
- $58/SF
- Holdover rate (200%)
- $116/SF
- Tenant stays April through June without new lease
- 3 × $116/SF / 12 × 12,500 SF = $362,500
- If consensual at 125%
- $226,562, a $135k difference for the same 3 months
Broker perspective
Tenants forget about holdover until the last 90 days of the term. By then the leverage is gone, landlord knows you're stuck. Address it in the LOI: cap holdover rent at 125% for consensual, require 30-day written notice before any premium kicks in, and exclude holdover for situations explicitly caused by landlord delay (e.g., the landlord didn't deliver renewal terms by the milestone date).
Frequently asked
People also ask
Why is holdover rent so high?
It's a deterrent. Landlords need leverage to either re-lease or get a renewal signed. 200% rent makes both happen quickly.
Can I negotiate the holdover rate?
Yes, at LOI stage. 125% consensual is achievable in tenant-favorable markets. 150–200% is typical landlord default.
Does holdover include OpEx pass-throughs?
Usually yes. Holdover applies to base rent; OpEx and CAM continue at the actual rate. Some leases double those too, confirm.
What's a 'consensual' vs 'non-consensual' holdover?
Consensual: landlord accepts payment and continues operating without objection. Non-consensual: tenant overstays without landlord agreement. Consensual usually caps lower.
Related terms
Renewal option
Tenant's contractual right to extend the lease at predefined terms, usually exercised 9–12 months before expiration.
Good guy guaranty
A limited personal guaranty that protects the landlord against unpaid rent only if the tenant doesn't surrender the space cleanly.
Base rent
The headline rent before pass-through expenses, usually quoted in $/SF/year and the starting point for every comp.
Default and cure period
When a tenant breaches the lease and the time the landlord must give them to fix it before pursuing remedies.
See holdover extracted from a real lease.
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