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Retail Leasing Toolkit (National and Select States)
Practical Law Toolkit w-026-7800 (Approx. 24 pages)
Retail Leasing Toolkit (National and Select States)
by Practical Law Real Estate
| Maintained • ExpandCalifornia, Florida, Georgia...Illinois, Massachusetts, New Jersey, New York, Pennsylvania, Texas, USA (National/Federal) |
Resources to assist both landlords and tenants in effectively negotiating, drafting, and amending retail leases. This Retail Leasing Toolkit includes Practice Notes, Checklists, and commonly used Standard Document and Standard Clause forms. These resources provide analysis of common retail leasing concerns.
This Retail Leasing Toolkit provides resources designed to assist counsel to landlords and tenants entering into a retail lease. These resources help parties to:
- Agree on business terms.
- Negotiate the retail lease, including:
- allocating risks;
- allocating costs; and
- obtaining appropriate protections.
- Manage their long-term business relationship, including responding to changed circumstances.
Retail leases are negotiated agreements that vary in length and complexity, depending on the specific premises, and the business needs of the tenant and the landlord. Although retail leases generally involve many of the same considerations as other commercial leases, they often include specialized provisions, such as:
- Specialized build-out and signage requirements.
- Percentage rent payments.
- Co-tenancy rights.
- Use restrictions, including specific:
- permitted uses;
- exclusive rights; and
- prohibited uses.
- Marketing charges.
Most retail leases are long term commitments, often five years or more, with ongoing obligations and risks. When negotiating a retail lease, the tenant should:
- Identify short and long-term business goals. The clearer the business goals, the more likely the finalized retail lease will be an effective and useful tool for the tenant and its business vision. For example, if the retail tenant believes it will grow in the near future, the tenant should negotiate for additional space options during the letter of intent and lease negotiation stages.
- Effectively negotiate the business terms and lease provisions. The retail tenant should understand the specific issues and lease provisions that affect the tenant's ongoing obligations.
- Obtain appropriate protections. The retail tenant should consider the time and money it invests in the space and whether it should negotiate certain protections to ensure the lease is not prematurely terminated. For example, in many instances a landlord's lender has priority over a tenant's lease and may be able to terminate the tenant's lease if there is a foreclosure action. The tenant may want to obtain a subordination, non-disturbance, and attornment agreement from the landlord's lender, to ensure that the landlord's potential future default under its loan, and the subsequent foreclosure by the landlord's lender would not permit the lender to prematurely terminate the lease.
The continuing costs of a retail lease can affect a retail tenant's bottom line. A retail tenant planning to lease retail space should use the general practice tips and negotiating techniques discussed in the resources in this Retail Leasing Toolkit to better assess and allocate the costs and other risks associated with a retail lease.
This Retail Leasing Toolkit contains continuously maintained Practice Notes, Standard Documents, Standard Clauses, and Checklists to help counsel for landlords and tenants manage the retail leasing process. This Retail Leasing Toolkit includes forms developed for use in particular states, as well as jurisdictionally neutral retail leasing resources. These jurisdictionally neutral resources include forms and guidance that are useful and relevant to landlords and tenants in every state.
This Retail Leasing Toolkit contains a series of resources providing guidance for amending leases and renegotiating business agreements in response to unexpected events, including COVID-19. Retail leases, in particular, have been severely impacted by the recent COVID-19 outbreaks. For current updates on certain state and local laws impacted by COVID-19, including eviction and foreclosure moratoriums, business closures, electronic signatures, recordings and notarization laws, and general crisis management guidance in handling real estate and construction matters, see Real Estate Global Coronavirus Toolkit.
This Retail Leasing Toolkit also contains a series of resources specifically addressing the growing trend of locating medical uses in shopping centers.
Practical Law has developed Toolkits to provide guidance for many other lease transactions:
- For a comprehensive set of resources to assist both landlords and tenants in negotiating office leases, see Office Leasing Toolkit (National and Select States).
- For a comprehensive set of resources to assist both landlords and tenants in negotiating office subleases leases, see Assignment and Subleasing Toolkit (National and Select States).
- For a comprehensive set of resources to assist both landlords and tenants in negotiating restaurant leases, including restaurants located within shopping centers, see Restaurant Leasing Toolkit (National and Select States).
- For a comprehensive set of resources to assist landlords, tenants, and lenders in negotiating ground leases and related financing documents, see Ground Leasing Toolkit (National and Select States).