What is Free Rent?

By offering free rent, the landlord can attract more tenants to the building, especially start-up businesses that need the rent abatement for the first month of their move. The amount of free rent offered depends on current market conditions, the vacancy rate in the subject building, and the financial strength of the tenant. The amount of free rent can range from zero to 3 months per year of lease length (three year lease equals nine months of free rent). The tenant can use the free rent "up-front" in the first year of the lease. Depending on the credit worthiness of the Tenant and the market demand for space, the landlord may insist that any free rent be spread over the lease term. This way, the tenant will not use the free rent period and then vacate soon thereafter. An example would be when a tenant receives every 12th month free, until the credit is depleted.  more