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A letter of credit (LC) offers distinct advantages over a cash security deposit. If the tenant defaults, drawing on the LC should be as easy and automatic as making a withdrawal from the tenant’s security deposit account. Unfortunately, it doesn’t always work out that way. The key is what the LC says.

Let’s say a dry cleaner wants to lease space in your strip mall. During negotiations, its attorney asks for a use clause permitting use of the premises for not only dry cleaning but also any other uses you find “reasonably acceptable.” It seems fairly unobjectionable, especially since you’re the arbiter of “reasonably acceptable.” So, you agree.

Depending on whether your property manager is a third party or works directly for you, it will probably check in differently. Because it’s providing financial information to you, a third-party property manager is obligated to report to you at least monthly regarding financial issues and any other predetermined topics. A property manager that works directly for you might have a tendency to check in more often. But both types of property managers should be instructe...

Q: Should you negotiate for your tenant to be responsible for removing some or all of the alterations it made during the lease?

There are two ways to evict a tenant: (1) “Actual eviction,” or going to court to get an eviction order, is the proper way; and (2) “constructive eviction,” or doing something so egregious to interfere with the tenant’s business that it forces the tenant to leave, is the other way—one you want to avoid at all costs. The term “constructive eviction” is misleading since the tenant actually decides to leave without being orde...

Filling a vacant space while your building is undergoing renovations can be tricky. Your lease needs to protect you from a new tenant who feels entitled to terminate his lease or sue you because portions of the space or common areas aren’t usable during construction. Our video gives you five quick tips for how to protect yourself: Five Tips for Limiting Constructio...

Co-working companies have reportedly caused a disruption in the marketplace in terms of how owners reward brokers for securing licenses and short-term leases. WeWork has reportedly been incentivizing brokers in a more aggressive structure than is typical in the industry.

If you require a tenant to have a guarantor before signing a lease, consider whether you want the guaranty to apply to renewal or extension terms created by future amendments to the lease. If so, make sure your lease and amendments specify that the guaranty will be “continuing,” so that the guarantor remains on the hook.

When a tenant insists on having its space delivered by a "drop-dead date" it has the potential to expose you to a variety of draconian consequences if the date isn’t met. That's why negotiations over this request are extremely important. If you don't carve out rights for yourself, you could end up giving the tenant free rent, or worse, suffering significant monetary penalties, and even the ability for the tenant to terminate the lease agreement. ...

Private commercial real estate continues to produce steady returns, in line with long-term expectations, according to the recently released UBS US Real Estate Summary. The authors report that CRE investors expect returns to slow in line with historical performance. With rent growth positive and the economy growing, expectations are for continued growth through 2019, though at a less robust rate than last year.