Rent Acceleration Clauses: Discount to Present Value

Rent acceleration clauses in commercial real estate leases are often the subject of contentious negotiations between the parties, and increasingly, the subject of review by courts when enforcement is challenged by tenants and guarantors.

Rent acceleration clauses protect the owner by providing it with the ability to demand immediate payment of all future rents outstanding upon default by the lessee. They provide an obvious benefit to the owner, but will give rise to demands by the prospective tenant.