An expansion right giving an existing tenant the option to lease adjacent space by matching an offer the landlord has already received from a third party.
A Right of First Refusal (ROFR) gives an existing tenant the contractual right to lease adjacent or available space by matching a bona fide third-party offer that the landlord has received and intends to accept. A ROFR is a reactive right — the tenant waits for the landlord to surface a real offer before the ROFR is triggered — distinguishing it from a Right of First Offer (ROFO), where the tenant receives the first look before the landlord markets the space at all. Lextract AI flags ROFR exercise windows as critical dates requiring calendar alerts in lease administration systems.
The most contested ROFR drafting question is whether the tenant must match all terms of the third-party offer — including lease term length, build-out specifications, and tenant improvement allowance — or only the economic terms (rent per square foot and free-rent period). A third-party offer that includes $80/RSF in tenant improvement allowances for a 10-year term may be impractical for an existing tenant who only needs 3 years. Tenants represented by brokers at CBRE, JLL, or Cushman and Wakefield typically negotiate "economic terms only" ROFR matching to avoid this trap.
ROFRs create complications when a landlord sells the entire property rather than just leasing space, because some ROFR clauses are drafted broadly enough to cover property sales as well as lease transactions. Institutional lenders and CMBS loan servicers scrutinize ROFR provisions during underwriting because an unexercised or poorly documented ROFR can cloud title and delay a sale closing. Tenant representatives negotiating expansion rights on behalf of growing companies should request that Lextract extract ROFR space descriptions, trigger conditions, and exercise deadlines as tracked critical dates in the lease abstract.
Lextract extracts these fields directly from your lease PDF:
A ROFR is a reactive right — the tenant can match any bona fide third-party offer the landlord receives for designated space, but the landlord controls the timing and terms. A ROFO is a proactive right — when expansion space becomes available, the landlord must first offer it to the tenant before marketing it externally, giving the tenant first-mover advantage. ROFOs are generally considered more tenant-favorable because the tenant sets the initial terms rather than reacting to unknown third-party economics.
When the landlord receives a bona fide offer from a third party for the ROFR space, the landlord must notify the tenant of the offer terms. The tenant then has a limited period — typically 5 to 15 business days — to match the terms exactly and exercise the ROFR. If the tenant declines or fails to respond within the deadline, the landlord may proceed to lease to the third party on those terms. The tenant should have internal approval processes and financial resources pre-arranged so decisions can be made quickly within the notice window.
ROFR exercise periods typically range from 5 to 15 business days from the date the landlord delivers written notice of the third-party offer. Shorter periods (5 business days) favor landlords by pressuring tenants into rapid decisions. Tenants should negotiate at least 10 business days — not calendar days — to provide adequate time for financial analysis and internal approvals. Some leases also specify that if the landlord later agrees to materially different terms with the third party, the ROFR resets and the tenant must be re-offered the space.
A practical 15-point checklist covering every major negotiation lever in a commercial lease — from base rent and TI to CAM caps, renewal options, and exit rights.
Lease renewal is your best negotiating opportunity as a tenant. Learn when to start, what to ask for, and how to use market data to lower your rent and improve terms.
The five main types of commercial leases — NNN, gross, modified gross, percentage, and ground — have very different cost structures and risk profiles. Here's how each works.
Upload a commercial lease PDF and get 126 structured fields — including all the terms defined in this glossary — extracted in minutes. $15 per lease.
Try It Free — No Signup Required