How to Compare Commercial Lease Proposals in Portland
When you have two or three lease proposals on the table, choosing between them is rarely as simple as picking the lowest rent. The total cost of occupying a space depends on dozens of variables — and in Portland's current market, where landlords are competing for tenants, the spread between proposals can be significant once you account for concessions, escalations, and operating expenses.
Here is how to evaluate commercial lease proposals side by side so you make a decision based on real numbers, not just asking rent.
Start with Total Occupancy Cost, Not Base Rent
Base rent is the number that gets quoted first, but it is often the least useful number for comparison. A space listed at $28.00/SF full service may cost less over the lease term than one listed at $24.00/SF NNN once you factor in operating expenses, CAM charges, and annual escalations.
To compare proposals accurately, calculate the total occupancy cost for each option over the full lease term. That means adding up base rent, estimated operating expenses, common area maintenance, property taxes, insurance, and any other pass-through costs — then subtracting concessions like free rent months and tenant improvement allowances.
The result is your effective rent per square foot per year. This is the number that matters.
Understand the Lease Structure
Portland landlords offer different lease structures depending on the building class and property type. The three most common are full service (gross), modified gross, and triple net (NNN). Each shifts operating cost responsibility differently between landlord and tenant.
Full service leases bundle operating expenses into the base rent, which makes budgeting simpler but usually comes with a base year stop — meaning you pay for any cost increases above the base year amount. NNN leases quote a lower base rent but pass through all operating costs directly. Modified gross falls somewhere in between.
When comparing proposals with different structures, you need to normalize them to the same basis. Convert everything to an effective gross rent that includes your estimated share of operating expenses. Without this step, you are comparing apples to oranges.
Compare Tenant Improvement Allowances
The TI allowance — the dollar amount the landlord contributes toward your build-out — varies widely between proposals and has a major impact on your upfront costs. In Portland's current market, TI allowances for office space typically range from $30 to $70 per square foot for new tenants, depending on the building class, lease term, and creditworthiness.
When comparing TI packages, consider the total dollar amount per square foot, whether the allowance covers only hard construction costs or also soft costs like architecture and permitting, the landlord's approval process and timeline, and whether unused allowance can be applied to rent.
A higher TI allowance often comes with a higher base rent — the landlord is amortizing the cost over your lease term. Run the numbers both ways to see which package delivers a lower effective rent over the full term.
Evaluate Escalation Clauses
Annual rent escalations can turn an attractive starting rent into an expensive lease by year five. The two most common structures in Portland are fixed increases (typically 2.5% to 3.5% per year) and CPI-based increases tied to the Consumer Price Index.
Fixed escalations are predictable, which helps with financial planning. CPI-based escalations introduce uncertainty — if inflation runs high, your rent increases faster. Some landlords offer a CPI escalation with a cap and floor (for example, minimum 2% and maximum 5%), which limits your downside.
Map out the rent schedule for each proposal year by year. A proposal with a lower starting rent but 4% annual increases will cost more over a seven-year term than one starting slightly higher with 2.5% increases.
Look Beyond the Rent: Key Non-Financial Terms
Several non-financial terms can significantly affect the value of a lease. When evaluating proposals, pay close attention to the following.
Renewal options. Does the proposal include a right to renew, and at what rate? A defined renewal option protects you from having to relocate or renegotiate from a weak position. Consider building a lease renewal strategy into the initial deal.
Expansion and contraction rights. If your business is growing — or if you are uncertain about future headcount — the ability to expand into adjacent space or give back a portion of your footprint is valuable. These rights are negotiable but rarely offered without asking.
Assignment and subletting. If your needs change mid-lease, the ability to assign or sublease your space gives you flexibility. Most landlords require consent, but the standard should be that consent is not unreasonably withheld.
Parking. In Portland, parking ratios vary significantly by submarket. A building in the Central Eastside may offer 1 space per 1,000 SF, while a suburban property in Beaverton or Tigard may offer 4 per 1,000 SF. The monthly parking cost per stall can add $100 to $250 to your effective rent depending on location.
Conduct Your Due Diligence on Each Property
Before committing to a proposal, do your due diligence on the building and the landlord. Review the building's operating expense history for the past three years to verify the landlord's estimates. Check the property condition — roof, HVAC, elevators — and who bears the cost of major repairs. Look at the building's vacancy rate, since high vacancy can lead to higher per-tenant operating cost shares. Research the landlord's reputation for responsiveness and capital investment.
A great rent number means less if the building has deferred maintenance or an unresponsive management team.
Build a Side-by-Side Comparison Matrix
The most effective way to evaluate multiple proposals is a structured comparison matrix. Include these categories in your spreadsheet or table.
Financial terms: base rent per SF, estimated operating expenses, TI allowance, free rent months, effective rent per SF, total occupancy cost over the lease term, escalation structure, and parking costs.
Space and building: usable SF, rentable SF, loss factor, building class, year built or renovated, floor plate layout, and parking ratio.
Lease terms: lease term, renewal options, expansion rights, termination rights, assignment and subletting provisions, and landlord consent standards.
Location: commute access, transit proximity, neighborhood amenities, and visibility.
A tenant representative can build this matrix for you and identify which proposal terms are negotiable based on current market conditions.
Negotiate from a Position of Strength
Having multiple proposals gives you leverage. When landlords know you are evaluating competing options, they are more willing to improve their terms on rent, concessions, TI allowances, and flexibility provisions.
The key is not to play landlords against each other blindly but to clearly articulate what matters most — whether that is a lower effective rent, a higher TI allowance, more flexibility, or a specific move-in timeline. A focused negotiation strategy produces better results than simply asking every landlord to sharpen their pencil.
Portland's market conditions in 2026 continue to favor tenants in most office submarkets, with vacancy rates still elevated and landlords competing for creditworthy tenants. That leverage will not last indefinitely — the construction pipeline has contracted significantly, which will begin tightening the market as existing supply absorbs.
What to Do Next
Comparing lease proposals is one of the highest-value steps in any commercial real estate transaction. Getting it right can save tens of thousands of dollars over the lease term and protect your business from costly surprises.
If you have proposals on the table and want a clear-eyed comparison, a broker can normalize the numbers and identify negotiation opportunities you may not see on your own. Norris & Stevens provides commercial real estate services across the Portland metro area.