Online Alerts

RSS

After a Kentucky shopping center tenant stopped paying rent and abandoned the premises, the landlord retook possession and billed the tenant for the roughly $3.211 million in unpaid rent remaining through the end of the lease. The tenant admitted to being in default but contested the landlord’s right to accelerate the rent because the lease didn’t say anything about acceleration. The court agreed, citing cases in the state ruling against accelerated rent cla...

Many shopping center leases include “radius clauses” banning tenants from opening similar businesses within a certain radius of the leased location. The idea is to prevent tenants from establishing essentially identical establishments to siphon off revenues and thereby minimize gross sales subject to percentage rent under the lease. Although protecting gross rent revenues is a legitimate business interest, radius clauses are frowned on because they stifle ne...

Q: Two tenants at the shopping center I own are currently in a dispute about who has the right to sell a certain product. A toy store tenant signed a lease with an exclusive use clause that gives it the right to be the only tenant in the center that sells toys. A variety store signed a lease that allows it to sell various items for entertainment. It was made aware at the time of the lease signing that the toy store h...

If you own an unusual building—one with “character,” a unique layout, or historic elements—you’ll need to find tenants that appreciate quirks. These types of properties can be wildly successful, but you’ll need to take into account marketing and leasing issues that may not be a factor when leasing traditional commercial properties.

Offering tenant improvement allowances (TIAs) is a great way to attract and retain small and new businesses that can’t afford the renovations they need to open shop. But it can also backfire if the tenant defaults before moving in or generating the revenues necessary to pay you back. TIAs also expose you to financial and liability risks. Negotiating the right TIA lease clause is crucial to avoid getting burned.

Q: Most tenants at my property require certain amenities and they won’t sign leases for space there if they don’t get them. But I’ve heard of circumstances under which office building and retail property owners have had to get rid of amenities. How can I carve out a right to eliminate amenities in the future if it becomes necessary?

Standard commercial net leases require tenants to pay not just rent but a proportionate share of the owner’s property taxes. Of course, property taxes are apt to fluctuate over time. Accordingly, owners typically include an “escalation” or “adjustment” clause in the lease enabling them to pass along to the tenant any tax increases that occur over the course of the lease. But getting a tenant to accept responsibility for a tax escalation is ...

If you give tenants an early termination option, make sure it gives you the right to charge prorated amounts for brokerage commissions and improvement allowances when the tenant exercises an early termination option. In this video excerpted from their recent live presentation, What Could Possibly Go Wrong? Key Issues to Resolve BEFORE an Office Lease Is Signed, attorneys Robert Reichman and Jonathan Weiss discuss the issue Read More

It’s among the least appreciated parts of the lease. But while rent, renewal, and other business terms command most of the attention, the so-called force majeure clause takes center stage when disasters occur. It’s at that point that both landlords and tenants recognize the importance of the clause and kick themselves for using generic boilerplate language rather than making the effort to negotiate a force majeure clause that makes sense for their particular...

Unlike mall food courts, food halls don’t just accommodate traffic; they drive it—and not just in malls but also at mixed-use, office, multifamily, and other non-retail properties. Like the mall food court, the food hall is a mix of retail eateries sharing space within a larger facility. The difference is that food halls offer not just fast food and shared seating, but a curated, high-end “foodie” experience supplied by local farmers, artisanal v...