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Temporary Leasing and Temporary Licensing
Not very long ago, the idea of leasing within the common areas of an enclosed regional center or on a short-term basis within any type of retail facility was viewed as more of an intrusion than a sought-after tenancy. Over the past several years, however, income derived from temporary leasing/licensing transactions has proven to be a tremendous financial benefit for landlords. As a result, nearly all major landlords have a division that deals exclusively with temporary leasing/licensing matters. Furthermore, the temporary tenants are no longer comprised solely of “mom and pop,” new “start-up” businesses and similar tenants that could not afford the rents paid by “in-line” tenants, but rather may be composed of national tenants and sophisticated tenants very familiar with the leasing process.
As a result, practices that at one time were common and standard for landlords in conducting these temporary leasing/licensing transactions have now become much more sophisticated negotiations. This article addresses several of the changes that have transpired over the past several years, including the use of a lease as opposed to a license, relocation rights, termination rights and exclusive rights.
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