Vertical and Horizontal Transportation: When Is Convenience a Bad Thing?

When dealing with vertical transportation, especially elevators and escalators, such transportation devices may obstruct the visibility from within the common areas of the shopping center to various tenant locations. Since, generally, tenants are very sensitive to the visibility of their signage and storefront not being obstructed, landlords and tenants should address the manner in which the vertical transportation may create such a problem. Further, depending on the location of such vertical transportation, access to certain of the tenants' spaces may be impeded by its placement in the common areas of the shopping center in front of tenants' spaces. A tenant should seek to protect the accessibility and visibility of its premises from such vertical transportation by implementing language in the lease that would restrict the landlord from placing vertical transportation in the common areas of the shopping center that would materially and adversely affect access to or visibility of the premises' signage and storefront. Further, a tenant may want to restrict such vertical transportation to a certain distance (eg, 50 feet from its premises).

Landlords should be careful in negotiating language with tenants that would serve to protect the tenant's premises from the presence of such vertical transportation because there may be other restrictions placed upon landlords by governmental authorities, larger tenants located at the shopping center, and permanent installations within the common areas of the shopping center, that may dictate the location of the placement of vertical transportation. Since the vertical transportation is a benefit for all tenants and customers of the shopping center, a landlord does not want to restrict its ability to place common area transportation within the shopping center. Also, as addressed in Part Two of this article, landlords may want to relocate the vertical transportation to other locations within the shopping center and do not want to have a particular tenant's lease dictating how the landlord may improve the common areas of the shopping center. As a result, landlords may want to have particular tenants who would be greatly impacted by the presence of such vertical transportation in front of their premises acknowledge and agree in their lease documents, that the tenant waives any claims that it may have now or in the future against the landlord based upon the placement of vertical/horizontal transportation within the common areas of the shopping center.

Next month's installment will include sample provisions and will address relocation or closure, and changing the means of transportation.

Glenn A. Browne is a shareholder in Braun, Browne & Associates, P.C., in Riverwoods, IL. His practice is concentrated in the areas of purchase and sale of real estate, commercial leasing, and lease-related matters.

Part One of a Two-Part Series

To the typical tenant, being located near or adjacent to vertical and horizontal transportation, which may include elevators, escalators, stairways, people movers, and similar transportation, would be a beneficial situation due to the customer traffic that such devices provide. However, several issues or potential issues arise when addressing the presence of vertical and horizontal transportation within the common areas of an enclosed regional shopping center. In particular, the following issues should be negotiated: accessibility and visibility; the right to relocate or close such transportation; and the right to substitute various means of vertical and horizontal transportation systems. This two-part article addresses these issues and provides sample model clauses for vertical and horizontal transportation.

Accessibility and Visibility

When dealing with vertical transportation, especially elevators and escalators, such transportation devices may obstruct the visibility from within the common areas of the shopping center to various tenant locations. Since, generally, tenants are very sensitive to the visibility of their signage and storefront not being obstructed, landlords and tenants should address the manner in which the vertical transportation may create such a problem. Further, depending on the location of such vertical transportation, access to certain of the tenants' spaces may be impeded by its placement in the common areas of the shopping center in front of tenants' spaces. A tenant should seek to protect the accessibility and visibility of its premises from such vertical transportation by implementing language in the lease that would restrict the landlord from placing vertical transportation in the common areas of the shopping center that would materially and adversely affect access to or visibility of the premises' signage and storefront. Further, a tenant may want to restrict such vertical transportation to a certain distance (eg, 50 feet from its premises).

Landlords should be careful in negotiating language with tenants that would serve to protect the tenant's premises from the presence of such vertical transportation because there may be other restrictions placed upon landlords by governmental authorities, larger tenants located at the shopping center, and permanent installations within the common areas of the shopping center, that may dictate the location of the placement of vertical transportation. Since the vertical transportation is a benefit for all tenants and customers of the shopping center, a landlord does not want to restrict its ability to place common area transportation within the shopping center. Also, as addressed in Part Two of this article, landlords may want to relocate the vertical transportation to other locations within the shopping center and do not want to have a particular tenant's lease dictating how the landlord may improve the common areas of the shopping center. As a result, landlords may want to have particular tenants who would be greatly impacted by the presence of such vertical transportation in front of their premises acknowledge and agree in their lease documents, that the tenant waives any claims that it may have now or in the future against the landlord based upon the placement of vertical/horizontal transportation within the common areas of the shopping center.

Next month's installment will include sample provisions and will address relocation or closure, and changing the means of transportation.

Glenn A. Browne is a shareholder in Braun, Browne & Associates, P.C., in Riverwoods, IL. His practice is concentrated in the areas of purchase and sale of real estate, commercial leasing, and lease-related matters.