A right of first offer (ROFO) gives the tenant the right to make the first offer to lease specified expansion space before the landlord markets that space to third parties. When the expansion space becomes available, the landlord must first offer it to the ROFO tenant on specified terms; only if the tenant declines may the landlord proceed to market the space externally.
By Angel Campa, Founder · Updated March 2026
A ROFO is generally considered more tenant-favorable than a ROFR because the tenant is the first to act — setting the initial terms — rather than reacting to a third-party offer the landlord has already negotiated. This gives the tenant pricing leverage and eliminates the need to match unknown third-party economics on short notice. ROFOs are particularly valuable in tight office markets where expansion space is scarce and the tenant needs certainty about availability before committing to headcount growth.
Specify that the landlord must offer the space at its genuine market rate with full tenant improvement allowance, rather than at an above-market rate that effectively nullifies the ROFO. Include a negotiating period of 30–60 days during which the parties negotiate in good faith before the landlord may proceed to the market. If negotiations fail, require that the landlord not lease to a third party at terms materially more favorable than those last offered to the ROFO tenant without re-offering to the tenant first.
ROFO at market terms (most common), ROFO at specified rental formula, ROFO with open negotiating period followed by market exposure, and ROFO that converts to matching rights if negotiations fail.
Lextract extracts these fields directly from your lease PDF when this clause is present:
Right of First Refusal (ROFR)
A right of first refusal (ROFR) gives the tenant the right to match any bona fide third-party offer the landlord receives for adjacent or specified expansion space before the landlord can lease that space to the third party.
Expansion Option
An expansion option gives the tenant the contractual right to lease additional specified space within the building or property at a predetermined rental rate or formula, during a defined window within the lease term.
Recapture Clause
A recapture clause gives the landlord the right to take back — recapture — the leased premises when the tenant requests consent to assign the lease or sublet the space.
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