How long should a flex space lease be?
Three to five years is the standard term for a small-bay flex unit, and the date the term starts counting matters more than the number of years. If the building is still under construction when you sign, the term in the letter of intent and the day you get keys are two different things, and the months in between are the part that costs tenants money.
Most owners arrive at this question carrying a number from a residential lease, where a year sounds like the safe answer. Almost nobody quoting new small-bay construction will write a one-year deal.
What is a typical flex space lease term?
Three to five years is the standard term on new small-bay flex construction, one to two years shows up on older second-generation space, and month-to-month is mostly a self-storage and co-warehousing product. The landlord is spreading the cost of the demising walls, the electrical panel, the door, and your finish-out across the term, so a shorter term either gets declined or gets priced higher per square foot. Annual base-rent escalations of 3 to 4% are normal here, which our flex space lease checklist covers alongside renewal options. Every year is quoted on NNN terms, so the escalation lands on base rent and the NNN estimate floats on top.
When does the lease term actually start if the building isn't finished?
The term is almost always measured from rent commencement, which is a set number of days after the landlord delivers the unit, and not from the day you sign. Four dates run a pre-construction deal, and only one of them is on the front page of the lease:
- Execution date. The day both parties sign. It binds you and gives you nothing to occupy yet.
- Delivery date. The day the landlord tenders the unit in the condition the lease describes. On new construction this is an estimate until a certificate of occupancy exists, because transformers, water taps, and inspections sit outside the builder's control.
- Rent commencement. Usually a fixed number of days after delivery, often 30 to 60 on a deal with finish-out, and that is the day your meter starts.
- Expiration. Counted forward from rent commencement. A 60-month term signed ten months before delivery keeps you committed for roughly 70 months from signature.
Get all four in writing before you sign.
What happens if the landlord delivers the space late?
Nothing happens automatically unless the lease says it does, because rent commencement simply moves back with delivery and you carry the cost of staying where you are. Your current landlord charges holdover rent, your equipment install slides, and the lease you signed is still performed from the landlord's side. Two clauses fix it. An outside date lets you terminate without penalty if delivery passes a hard calendar date, and a day-for-day free rent credit pays you back for the delay. On our own pre-leases we [[CONFIRM: ScaleUp's standard delivery-date remedy, outside date and/or day-for-day abatement]].
Does a longer term get you a better deal?
Usually yes, and the discount tends to arrive as finish-out dollars and free rent rather than as a lower headline rate. A landlord amortizing your buildout over 60 months can pay for more of it than one amortizing over 24.
| Term | What it usually buys | Who it fits |
|---|---|---|
| 1 year | Second-generation space as-is, no finish-out, highest rate per foot | Testing a market or covering seasonal overflow |
| 2–3 years | Modest finish-out, a renewal option if you ask in the LOI | Growing too fast to name your square footage in 24 months |
| 5 years | Full finish-out, free rent at commencement, best rate posture | Equipment bolted down, staff hired, customers who know the address |
If you are weighing 3 against 5, price the difference in moving cost. Racking, a compressor drop, and an office build get paid once and abandoned when you leave, so two fewer years of commitment can cost more than it saves.
What do the Rockwall and McKinney timelines mean for your term?
Both parks are pre-leasing ahead of delivery, so every lease we sign right now has a gap between execution and rent commencement. Rockwall Flex Park is 53,700 SF on five acres in the Rockwall ETJ, 30 units at 1,500, 2,000, and 3,000 SF, each with a 12x12 grade-level door, individual HVAC, 3-phase power, and 18-foot clear height, delivering Summer 2027. McKinney Flex Park is 75,000 SF on 6.2 acres, in design and permitting for a December 2027 delivery, and its unit mix runs 5 retail units at 1,440 SF, 10 flex units at 1,440 SF, 12 at 1,800 SF, 5 at 1,920 SF, 4 at 2,400 SF, and 4 showroom flex units at 3,150 SF. Signing before a unit is framed is the one window where size and door placement are still yours to influence, which is why that mix is not final until the leases are. Our standard term at both parks is [[CONFIRM: ScaleUp standard lease term offered at Rockwall and McKinney]].
Term length is a bet on the submarket too, and the growth around these sites is why small-bay flex here trades on 3 and 5 year terms rather than 10. Celina grew 24.6% and Princeton 18.1% between July 2024 and July 2025, and McKinney added 8,504 residents to reach 236,001, according to the U.S. Census Bureau's Vintage 2025 city and town estimates. Rooftops price the rent the trades pay, and a tenant who signs five years today has locked their side of it. What ETJ status means for a flex lease covers why the Rockwall build runs on a different clock.
FAQ
What is a typical flex space lease term?
Three to five years is the standard term on new small-bay flex construction, one to two years shows up on older second-generation space, and month-to-month is mostly a self-storage and co-warehousing product. The landlord is spreading the cost of the demising walls, the electrical panel, the door, and your finish-out across the term, so a shorter term either gets declined or gets priced higher per square foot.
When does a flex lease term actually start if the building is still under construction?
The term is almost always measured from rent commencement, which is a set number of days after the landlord delivers the unit, and not from the day you sign. A 60-month lease executed ten months before delivery keeps you committed for roughly 70 months from signature, so ask for the delivery date, the rent commencement formula, and the expiration date in writing before you sign.
What happens if the landlord delivers the space late?
Nothing happens automatically unless the lease says it does, because rent commencement simply moves back with delivery and you carry the cost of staying where you are. Ask for an outside date that lets you terminate without penalty if delivery passes it, and ask for free rent granted day for day against the delay.
Pre-leasing a unit for 2027?
Tell us your move-in window and we will show you the dates in writing before anything gets signed. See the Rockwall and McKinney units and the delivery schedule for each.
Ask about a unit →