Landlord Just Hit Me With a Huge Rent Increase: What Are My Options?

If you're a Midtown Manhattan business owner staring at a lease renewal proposal with a number that made your stomach drop, you're not alone. This is one of the most common situations we help tenants navigate at Noah & Co. — and the good news is you have more leverage than you think.

First, Take a Breath — This Is a Negotiation, Not a Verdict

When your landlord sends over a renewal proposal with a 20%, 30%, or even 40% rent increase, it can feel like a done deal. It isn't. That number is an opening position, and in most cases it has room to move — sometimes significantly.

What you do in the next 30 to 90 days will determine whether you end up overpaying for years or whether you walk away with a deal that actually reflects the market. The worst thing you can do is panic, accept it, or do nothing.

Why Did My Landlord Raise the Rent So Much?

There are a few reasons this happens, and understanding the motive helps you respond correctly.

They're testing you. Landlords routinely send aggressive renewal proposals to tenants they believe won't push back or won't bother looking at alternatives. If they think you're locked in — because of your build-out, your location, your lease expiration timeline — they'll price accordingly.

Their asking rents genuinely went up. Depending on your submarket and the year you originally signed, there may be a real gap between what you're paying and what the building is currently marketing space at. But asking rent and what a tenant actually pays (called "effective rent") are two very different things once you factor in free rent periods and tenant improvement allowances.

Your lease has escalation clauses that compounded over time. Many Midtown leases include annual rent escalations of 2–3% or fixed step-ups every few years. Over a 5 or 10-year term, those add up — and the landlord is now resetting the base from that higher number.

What Are "Market" Rents in Midtown Right Now?

This is the question you need answered before you respond to anything. You cannot negotiate blind.

Midtown Manhattan office rents vary significantly by submarket and building class. As a general benchmark heading into 2025:

• Plaza District / Park Avenue corridor Class A rents typically $90–$200+ per sq ft
• Grand Central / East Midtown $65–$150+ per sq ft
• Times Square / West Midtown$65–$95 per sq ft
• Penn Plaza / Hudson Yards adjacent$35–$80 per sq ft

What Leverage Do You Actually Have?

More than you think — especially if you have time.

Your timeline is your biggest asset. If your lease expires in 9–18 months, you are in the strongest possible position. Landlords do not want to re-tenant a space. Vacancy is expensive for them — not just lost rent, but brokerage commissions, build-out costs, and the time it takes to find and close with a new tenant. A reliable existing tenant is worth a discount.

The threat of leaving is real leverage, even if you don't want to move. You don't have to actually want to relocate to benefit from looking. Getting a competing proposal from another building — even one you'd never take — gives you a data point and signals to your landlord that you're serious. This changes the conversation entirely.

Your build-out works in your favor too. If you've invested in your space and the landlord knows re-leasing it means funding a new tenant's build-out, they have a financial incentive to keep you — at a reasonable number.

What Should You Actually Do Right Now?

Here's a practical sequence:

1. Don't respond yet. Acknowledge receipt, say you're reviewing it, and buy yourself time. Don't signal desperation or that you're locked in.
2. Understand what the market actually looks like. Pull comparable availabilities in your submarket. What are similar buildings offering? What concessions are landlords providing to new tenants? This is the data you need to negotiate.
3. Look at alternatives, even casually. Tour a couple of options. You don't have to move. But the act of looking — and letting your landlord know you're looking — shifts the dynamic.
4. Counter with data, not emotion. When you do respond, come back with market comps, reference the concession packages being offered elsewhere, and propose a number that's grounded in reality. Landlords respond to data.
5. Understand your lease before you sign anything. Renewal terms often introduce new clauses — escalation structures, operating expense caps, personal guarantee language — that weren't in your original lease. Read everything.

Should I Use a Broker or Handle This Myself?

This is worth addressing directly because a lot of tenants in your position wonder whether they really need representation.

Here's what most people don't realize: tenant representation is free to you. The landlord pays the brokerage commission on both sides of the transaction — it's baked into the economics of the deal. Whether you have a broker or not, that commission gets paid. The only question is whether it goes to an advocate working for you, or stays with the landlord's broker, who legally represents the other side.

A good tenant broker brings market data, relationships with landlords and their teams, and negotiating experience across dozens of deals a year. They know what's actually being offered in the market — not just what's posted — and they know what landlords will and won't move on.

For a renewal negotiation on a 5 or 10-year term, even a modest improvement in your rent or concession package can translate to six figures over the life of the lease. That's not a small thing.

The Bottom Line

A big rent increase proposal is not the final word. It's the beginning of a negotiation, and tenants who approach it with the right information and the right support almost always end up in a better position than tenants who accept the first number or try to navigate it alone without market data.

Noah & Co. specializes in tenant representation for office occupiers in Midtown Manhattan.
We work exclusively on behalf of tenants — never landlords.