In a lease, ‘additional rent’ generally is defined as any amount due to landlord by tenant that is over and above base rent.  Depending on the lease, the big three additional rent items are (i) common area maintenance costs, (ii) real estate taxes, and (iii) landlord’s insurance. 

Common area maintenance costs (CAM), taxes, and insurance are highly technical lease provisions, and their respective lease sections are complicated.  This post cannot cover everything about them, and an experienced attorney should be consulted for the lease review.  That said, here are nine tips for consideration:

Common Area Maintenance Costs :  

• 1.  CAM

…
Continue Reading Leasing 101: Nine Tips for Negotiating Additional Rent

Generally speaking, a tenant should be allowed to have control over the aesthetic design and construction standards of its leased premises. 

Subject to a landlord’s signage and construction requirements, certain prior approval from landlord, and applicable law, the tenant should be able to decorate, improve, and renovate its leased premises, the storefront façade, and the store’s signage in such ways that tenant feels necessary for its business operation. 

Landlords typically will want to have review and approval rights over tenant alterations in the premises.  The logic is straightforward: the landlord owns the building and wants to know what the…
Continue Reading Leasing 101: Tenant Alteration Rights

 Not all retail tenants can get a landlord to agree to a co-tenancy provision, but this still should be part of the tenant’s discussion with its broker or landlord. 

A co-tenancy provision allows a tenant to pay a reduced amount of rent when certain conditions are not met either before the store opens or once the store is operating. 

Usually, the condition is that certain other stores, such as anchors, or a certain percentage of stores in the center have to be open for business. 

For example, if a certain anchor tenant plus 70% of the remaining space in the…
Continue Reading Leasing 101: The Co-Tenancy Clause

 
 
Tenant should anticipate that the lease will require it to maintain general liability and property casualty insurance during the term.  

This provision is as much for tenant’s benefit as it is for landlord’s.  

Insurance provisions are technical, use and location specific, and often subject to changes that the insurance industry regularly makes to the types of insurance that are ordinarily available.

That said, there are a few broad comments that can be made regarding insurance.  The rest should be discussed with an experienced lawyer when the actual lease is being negotiated.  

Those few broad comments…
Continue Reading Leasing 101: Insurance

During a lease negotiation, the retail tenant likely will spend the majority of its energy focusing on the business terms in the lease – such as rent, term, TI allowance, security deposit.
The tenant also should spend some time thinking about its operation in the premises during the term.    

Three problems that likely will arise during the lease term are (a) landlord’s use of the space right in front of the store, (b) interference with the visibility of and/or access to the store, and (c) disturbances by landlord from construction, including repairs and renovations.
 
The “No Build Zone”

The retail tenant should…
Continue Reading Leasing 101: No Build Areas, Visibility and Access, and Non-Disturbance

We will be returning to the Nevada desert from Sunday, May 20th, through Tuesday, May 22nd.  Jamie Moorhead will be there meeting with clients, talking with members of his deal teams, and visiting with new clients.  If you would like to visit while there, we would love it!  Please feel free to email: jmoorhead@moorhead-law.com.
Continue Reading Moorhead Law Group at ICSC!

 Not all retail tenants can get a landlord to agree to a co-tenancy provision, but this still should be part of the tenant’s discussion with its broker or landlord. 

A co-tenancy provision allows a tenant to pay a reduced amount of rent when certain conditions are not met either before the store opens or once the store is operating. 

Usually, the condition is that certain other stores, such as anchors, or a certain percentage of stores in the center have to be open for business. 

For example, if a certain anchor tenant plus 70% of the remaining space in the…
Continue Reading Leasing 101: The Co-Tenancy Clause

 A radius restriction is a restriction put in place by a landlord when it charges percentage rent.  The radius restriction prevents a tenant from opening another store within a certain radius of the leased premises. 

Purpose

The purpose is to prevent tenant from opening other nearby stores that would take away sales from the leased store, causing a decrease in percentage rent. 

Landlord’s potential remedies in the event tenant does open a store within the radius include adding the sales figures from the other store or stores to the sales figure for the leased premises.

Radius Distance Can Depend on Geography…
Continue Reading Leasing 101: Radius Restrictions

As part of the lease negotiation process, the tenant should make sure it obtains landlord’s approval for the type and design of signage that it needs, as well as the number and location of the signs.

Office Tenant Signage
An office tenant may need relatively minimal signage.  Usually, the office tenant will want signage at its office door, as well as directory signage in the lobby.  Other signage an office tenant may want might be elevator signage and exterior building signage.  The type and amount of signage an office tenant can obtain is dependent on the tenant’s leverage, which…
Continue Reading Tenant Leasing 101: Negotiating the Best Signage for Your Lease

The Moorhead Law Group, LLC recently moved its office.  Our new contact information is:

Moorhead Law Group, LLC
500 North Western Avenue
Suite 200B
Lake Forest, IL 60045
224.544.5896 telephone
www.moorhead-law.com

We very much appreciate all of the help, confidence, and trust over the 5+ years to make the firm a success.
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Reprinted from the Chicago Daily Law Bulletin, February 27,2018 :

Another Olympic Games is in the books, the 2018 Winter Games having wrapped up o
 
n Sunday night in PyeongChang, South Korea.  By virtually all accounts, these Winter Games were a success. 

A few hiccups did occur.  High winds disrupted some ski events, and the absence of National Hockey League players was noted in the men’s hockey competition.  But, all in all, these Games avoided the poor execution of the Rio Games in 2016, the huge expense of the Beijing Games in 2008, and (so far) the scandals of…
Continue Reading Olympic Recap: Ten Takeaways from PyeongChang