A right of first refusal (ROFR) is a lease provision giving a tenant the right to match a third-party offer on additional or adjacent space — often a neighboring suite or the rest of the building — before the landlord can accept that offer from another prospective tenant. ROFR only activates once a third party makes an actual offer, distinguishing it from a right of first offer (ROFO), which gives the tenant first opportunity before the landlord markets the space to anyone else.
How ROFR works in practice
Under a ROFR, the landlord is free to market and negotiate with third parties for the specified space, but before finalizing a deal, must present the negotiated terms to the existing tenant, who then has a defined window (commonly 5 to 15 business days) to match those terms and take the space themselves instead.
This structure protects the tenant's option to expand without requiring the landlord to hold space off the market indefinitely — the landlord can pursue other prospects, and the ROFR tenant only needs to act once a real offer materializes.
ROFR vs ROFO comparison
| Provision | When tenant right activates |
|---|---|
| Right of First Refusal (ROFR) | After landlord receives a third-party offer |
| Right of First Offer (ROFO) | Before landlord markets the space to any third party |
What to watch for before committing
Response window length
Confirm the time you're given to match a third-party offer is realistic for your internal decision-making process.
Matching terms exactly
Understand whether you must match the exact third-party terms or if some negotiation flexibility remains.
Defined space and duration
Confirm exactly which space the ROFR covers and how long the right remains in effect during your lease term.
Notice requirements
Clarify how and when the landlord is required to notify you of a qualifying third-party offer.
Financial capacity to act quickly
Since ROFR windows are often short, confirm your organization can commit financially within the required timeframe if triggered.
Recording the right
For significant ROFR provisions, consider whether the right should be recorded against the property to protect it through any building sale.
When you need to know this
- Planning for future growth — securing the option to expand into adjacent space without committing to it immediately
- Multi-tenant building strategy — protecting access to space that could become critical for operations later
- Negotiating a new lease — adding a ROFR as a low-cost way to preserve future flexibility
- Evaluating competing space offers — understanding your rights if a landlord receives interest in space you might want
Frequently asked questions
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