Negotiating Tips

Count Installment Payments in Gross Sales as Early as Possible to Maximize Percentage Rent

June 24, 2019    

You’re negotiating a lease with a retail tenant that sells some goods on an installment basis in which customers make a series of payments over a period of time. How do you calculate these sales for purposes of calculating percentage rent? The tenant wants installment sales to count as...

Negotiate Use of One Experienced Arbitrator for Extension Option Disputes

January 17, 2019    

“Alternative dispute resolution” (ADR) methods, including arbitration, are often used by commercial real estate owners to resolve differences with tenants out of court. Arbitration is a great solution for parties who are in disagreement about a single, clear-cut issue. Common, but...

Carve Out Owner-Favorable Flexibility When Negotiating Visibility Protection

April 30, 2018    

Because visibility of its show windows and storefront signage is always a concern for retail tenants, a discussion about visibility will inevitably come up in negotiations for a lease for space at your center. Savvy tenants will demand that you agree in the lease not to block this visibility....

Limit Tenant's Hours Cotenancy Clause Remedies

November 22, 2017    

An hours cotenancy clause—which says that a tenant will be required to open during the center’s normal hours of operation only if a certain percentage of other tenants are also open—is a typical provision in retail leases. But like many other lease issues that seem ordinary at...

Negotiate Mutually Beneficial Confidentiality Promise

October 18, 2017    

Audits can help you uncover any discrepancies in what you’re collecting in percentage or other types of additional rent, so it might seem as if they’re always positive. But conducting an audit in a way that harms a tenant can leave you open to claims. It’s not unusual for a...

Tailor Lease for Unique Space

September 21, 2017    

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...

Carve Out Right to Future Financially Viable Rent Rate

August 24, 2017    

In order to entice a tenant you might offer very competitive initial rent. At the same time, you need to make sure that you maintain a certain level of income over time. Rent adjustments are typically a part of negotiations with a prospective tenant for space at the property you own. But if you...

Include Six Requirements in Lease with Limited Liability Tenant

July 21, 2017    

Not all tenants are created equal when it comes to the way they are organized. That is, whether a tenant is a professional corporation, professional limited liability partnership, or professional limited liability company matters during lease negotiations, and it should guide the guaranty...

Attract Advantageous Tenants with Unusual Concessions

February 22, 2017    

Vacancy rates are still a struggle for shopping center and office building owners in some areas. Maybe your local economy isn’t robust and businesses aren’t interested in new office space, your projections for how much foot traffic your center will see were higher in theory than in...

Don't Lead Tenant to Reasonably Rely on Promises of Your Employees

September 26, 2016    

Commercial property owners, and especially those that own large or multiple properties, are likely to have several employees. If you have a staff of professionals who help you operate your properties, be very careful about how much official power you give to them and how much interaction they...

Get Right to Reject Undesirable Prospects After Tenant Breaches Lease

July 14, 2015    

Unfortunately, at some point you may have to evict a tenant or pick up the pieces if a tenant abandons its space. It’s hard enough to have to regroup and find a new tenant quickly. But being forced to take on an undesirable tenant—one with a bad credit rating or that doesn’t...

Consider Alternative to Cash Security Deposit

May 27, 2014    

While the economy has steadily improved in many areas, it’s still important to protect yourself from the perils of a bankrupt tenant. When negotiating with a prospective tenant—especially one that’s small or not financially strong—keep in mind that if it experiences...