We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
If you defaulted on the mortgage loan for your office building or center because a major tenant didn’t pay its rent, leaving you short of money to make a loan payment, it seems only fair that the delinquent tenant should have to reimburse you for the loan-related damages you had to pay to the lender. But if your lease doesn’t allow you to recover loan-related damages from a delinquent tenant, you’ll miss the chance for reimbursement.
At the time you rent space to a tenant at your shopping center or office building, it may be financially healthy, with no red flags indicating that it will struggle at some point. But that doesn’t mean that a profitable tenant won’t face challenges in the future. Factors from a poor business plan, too-rapid expansion, or competitors moving into the area could send a tenant into a downward spiral—which will directly affect you.
On July 17, the Senate passed the Terrorism Risk Insurance Program Reauthorization Act of 2014, extending the original Terrorism Risk Insurance Act (TRIA)—enacted in 2002 following the events of 9/11—for an additional seven years. Many CRE industry participants have been advocating for an extension of TRIA in order to provide clarity and stability with respect to terrorism risks.
Because retail tenants are concerned about keeping their storefronts and window displays visible to potential customers—and providing easy access if a customer chooses to shop there—it’s common for them to ask for a lease clause barring you from doing anything that makes their space harder to see or get to. That’s reasonable, but it has the potential to make it harder for you to do maintenance work or renovations that, unfortunately, block visibility. But you can protect your tenant’s visibility and access without hurting yourself if you:
Q: I recently bought a strip mall that I plan to demolish. I’ll be building a new shopping center there. I notified the tenants that I’ll be invoking the provisions in their leases that give me the right to cancel them. One tenant has already refused to leave. I’m thinking about using self-help to evict the tenant if it doesn’t change its mind. What should I know before I attempt to do this?
The world’s largest real estate investor has kicked off a trend that’s being picked up in the CRE world. Blackstone Group LP has led a wave of investors in Indian commercial property. Blackstone representatives said that there has been rental growth in almost all markets, and tenants are seeing a huge uptake in what they do and therefore taking large spaces in India.
Before assuming that your tenant is responsible for paying a share of your attorney’s fees incurred because you pursued legal action that benefitted all of the tenants at your center or building, check your lease. A recent case demonstrates once again that lease terms often dominate when there is a dispute between an owner and tenant.
Q: A visitor to the mall I own was injured while taking part in a recreational activity held in the parking lot by a local charity group that also leases space there. The charity group provided the entertainment free of charge. I’ve heard about “recreational use immunity” sometimes protecting property owners from liability in this scenario. Does recreational use immunity apply to me?
The e-commerce purveyor of vintage and handmade goods, Etsy, has signed a lease for a substantial amount of space in Brooklyn to set up its headquarters. The company, which was founded in New York, has chosen to set up shop in the former Jehovah’s Witnesses’ Bible-printing plants that the Kushner Cos. and its co-investors bought last year.
If the lease with your strip mall or shopping center tenant doesn't include provisions allowing you to control its right to choose and change its trade name, you are giving it the power to cause serious problems. At the very least, a tenant's illegal or unsuitable use of a trade name may give your center a bad reputation. In the worst-case scenario, it could result in a lawsuit if the tenant's competitor claims that the trade name was stolen from it and believes that you knowingly permitted the trademark violation. Consider the following to protect yourself.
RSS