Rent Credits in a Commercial Lease: An FAQ Guide
Rent credits in a commercial lease are frequently misunderstood. Many people think of “free rent” at the beginning of a lease term and stop there. In reality, rent credits are broader than that. They can be negotiated concessions at lease inception, or they can...
How to Terminate a Commercial Lease – A Guide for Tenants
One of the questions we get asked most often is: as a commercial tenant, how can I terminate my lease? The first thing to understand is that, generally speaking, a commercial lease does not give a commercial tenant the right to terminate early. There is usually no...
Commercial Landlord’s Guide to Letters of Credit
In virtually every commercial lease negotiation, landlords look for credit support to backstop a tenant’s obligations. Whether it is unpaid rent, repair obligations, or damages caused by tenant default, landlords want to ensure there is a readily accessible source of...
Title and Survey Red Flags Unique to Industrial Sites
When evaluating an industrial site—whether for acquisition, development, or leasing—the title report and survey can reveal issues that aren’t as common in other asset classes. While every commercial property raises the usual concerns of access, encroachments, and...
How Real Estate Investors Can Transfer Property Into an LLC
Many real estate investors begin by purchasing investment property in their personal names. While this is common, it is not always the most strategic ownership structure. Transferring real estate into a limited liability company can provide liability protection,...
Structuring a Tenant-in-Common (TIC) Arrangement to Avoid IRS Partnership Treatment
Tenant-in-common (TIC) ownership structures are a common vehicle for commercial real estate investments, particularly where multiple investors pool funds to acquire a property. A properly structured TIC allows each investor to own a direct, undivided interest in the...
Drafting Tip: Addressing Direct Claims in Indemnity Provisions in Commercial Real Estate Contracts
In commercial real estate contracts, indemnity provisions are a foundational risk allocation tool. They are commonly used to shift responsibility for certain claims and losses from one party (the indemnified party) to another (the indemnifying party). At a high level,...
Negotiating the definition of “Gross Sales” for Purposes of Calculating Percentage Rent in a Retail Lease
Negotiating the definition of sales, often referred to as "gross sales," is an important consideration for retail tenants who are subject to percentage rent provisions. Percentage rent is a form of additional rent calculated based on a percentage of the tenant's...
A Tenant’s Guide to Estoppel Certificates
When a landlord requests an estoppel certificate, commercial tenants should approach the document with caution and understanding. While an estoppel certificate is not intended to modify a lease, it can significantly impact a tenant's future rights and claims. This...
A Guide to Negotiating a Permitted Use Clause in a Commercial Lease
A permitted use clause in a commercial lease defines and limits the type of business a tenant can operate within a leased premises. This clause serves as a critical point of negotiation between landlords and tenants, with significant implications for tenant mix,...