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When a tenant defaults on its lease, commonly because its business fell through, owners are generally required to try to find a new tenant for the space in a reasonable amount of time. However, the defaulting tenant is on the hook for rent for the remainder of the lease, unless a new tenant fills the vacant space. If that happens, then the defaulting tenant is liable only for unpaid rent for the time between its default and when the new tenant fills the vacant space.
If you’re considering allowing a seasonal or short-term business to set up shop in a portion of your parking lot, make sure that you use a license—not a lease—to do this. While business-related events, like car shows, book sales, or Christmas tree sales can boost traffic to your center, and your bottom line, it’s important to nail down some standard provisions in the license agreement so that you can get the full benefit of these opportunities.
Q: What is the best response if a tenant requires me to promise that the construction of future phases of my shopping center won’t interfere with its ability to run its business, or that all access spaces around its space are kept clear, including the center’s main entrance?
In his twelfth and final State of the City address in Brooklyn, New York City Mayor Michael R. Bloomberg detailed his agenda for the year and the unfinished business his administration intends to accomplish during that time. Several commercial real estate projects have been prioritized, including the redevelopment of the South Street Seaport. Breaking ground on the Pier 17 renovation project will create 295,000 square feet of new retail space this year.
With respect to a formal agreement between a commercial property owner and a prospective food truck operating on the owner’s property, a revocable license agreement may be best. That’s because it doesn’t create a landlord-tenant relationship and the owner would be able to terminate the agreement immediately.
The recession only sped up what mall owners in suburban areas had been experiencing for some time: brick-and-mortar retailers large and small going bankrupt and shutting down, scaling back, or closing stores and offering their products mostly online.
Shopping lists that customers take to Memphis-area Walmart Supercenters this year could include homes and office space. First National Realty plans to put real estate offices in local Walmarts, the first by the end of March.
The decision was made largely because of the foot traffic that the chain retailer gets. Providing a mix of real estate services and retail shopping is part of Walmart’s strategy to take the shopping experience to a new level where shoppers can get everything they need in one place.
Your work letter agreement—that is, the contract that establishes the terms and conditions of structural changes that the leased space will undergo in preparation for your tenant’s occupancy—should clarify what the tenant may purchase with its improvement allowance. That’s because you don’t want the tenant to use its tenant improvement allowance (TIA) for equipment, personal property, furniture, or other items that won’t become your property at the end of the term.
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