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Keeping the operating costs that you pass through to tenants low gives your shopping center or office building a competitive edge. So, to keep insurance costs low while making sure that you have adequate coverage, consider a policy with low premiums and a high deductible. But if you pass through a portion or all of those low premiums to tenants, you should negotiate the right to pass through a portion or all of the high deductible as well.

Don't be surprised if a prospective tenant—especially one with a growing business—asks for an expansion option in its lease. This clause reserves space owned by you, typically contiguous to the tenant's, when it becomes available. An expansion option is valuable to a tenant because if it needs to expand its operations, it'll have the opportunity to do so, but won't be obligated to take the space if it determines that it doesn't nee...

Don't be surprised when a new tenant that has decided to rent office building or shopping center space from you wants to make requests early in the lease negotiating process. Typically, tenants make these requests in a letter of intent (LOI), a document that's signed by the tenant and owner indicating both parties' intent to sign the lease that they're considering. The LOI is your chance to clarify key terms and make sure that the tenant doesn't appr...

By Peter D. Morris, SCLS, SCSM, SCMD

Conduct an Internet search for “creative leasing ideas” for retail properties, and you'll see a lot of references to leasing to nontraditional uses, such as libraries and community art galleries, or exploiting pop-up store opportunities. Used correctly, these are valid options that have filled space and increased traffic for shopping center owners. But when you start to consider creative leasing, you shou...

Effectively managing snow and ice accumulations is a critical component of maintaining commercial properties in a safe condition. Whether you're the owner of a large commercial property with sufficient in-house personnel and the appropriate equipment necessary to do your own snow removal, or you own a smaller property and must hire an outside contractor to perform this service, your lease provisions should specify who's responsible for the many aspects involved ...

As a retail property owner, you know that the success of your strip mall or shopping center largely depends on the mix of tenants you rent space to. Tenant synergy—that is, stores functioning together to draw shoppers that a center normally wouldn't capture without them as a group—can make or break your center's profitability. That's why it's important to have each tenant commit to continue operating the same way—selling the same type o...

Two types of repair covenants are standard provisions in almost all commercial leases. One type of repair covenant specifies what a tenant is required to do to maintain and repair its space while the lease is ongoing. The second type of repair covenant specifies what condition the space must be in at the end of the lease—in other words, what items the tenant has to repair before turning over the space to the owner when the lease is terminated or the ...

By Suzanne Reifman, partner at Vinson and Elkins

We are seeing an increase in cases in which building owners that have not previously leased space to the government find themselves landlords to federal government tenants, either by acquiring a foreclosure property with a government lease or by participating in a government procurement and securing a lease award. There are a host of advantages to housing a government tenant, especially in a “down&rdquo...

Traditionally, renting space to kiosks—small, independent stands that sell merchandise—has been a low-maintenance and relatively hassle-free way of supplementing shopping center profits—if it's done correctly. And, for the last two seasons, pop-up tenants—temporary stores that sell only one type of merchandise—have boosted drooping profits from declining sales at traditional “core”—that is, permanent—stores in ce...