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Enhancing Tenant Flexibility in In-Line Retail Leases
While it would not be possible to identify a “typical” in-line retailer (their perspectives vary as much as their products and their business plans), there are issues that recur in negotiation of leases for them. As attorneys negotiating on behalf of in-line retailers, it is important to consider the potential implications of the lease over its entire term and to plan for changes in clients' business plans by making the leases more flexible. This article examines selected practical issues in flexibility and makes recommendations for negotiating stronger leases from the retailers' perspective.
First, a practice note. The deal makers ' landlords, prospective retailers and retail brokers ' often negotiate letters of intent or term sheets that lay out in eloquent detail the rental rate, rental term and other traditional “business terms” of a pending lease without addressing some of the issues discussed in this article. To the extent any of these issues are important to the retailer's business plan, it is usually wise to make note of them early in the lease negotiations rather than “leaving them to the lawyers” to work out later.
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