Business leaders in need of retail space often choose to lease. Those negotiating commercial lease terms often try to secure arrangements that help their companies thrive. Keeping costs low and retaining flexibility are often top priorities.
Landlords usually want to see their business tenants succeed while simultaneously protecting their interests. The unique clauses integrated into a commercial lease can enhance or diminish the protections extended to both the landlord and the commercial tenant. Those looking for retail space in a strip mall are among those who might want to negotiate clauses that prevent direct competition from neighboring tenants.
Exclusive use clauses protect tenants’ market share
When there is only one coffee shop in a strip mall, everyone visiting who needs a caffeine fix patronizes the same business. If a competitor opens up at the opposite end of the strip mall, the customer base for the existing coffee shop diminishes substantially. They may end up in a pricing war, and both businesses may ultimately suffer.
Commercial tenants, especially those operating retail establishments in a shared facility, often request the addition of exclusive use clauses to commercial leases. An exclusive use clause prevents the landlord from leasing a space in the same facility to a business operating in the same economic niche. Such provisions are also beneficial for landlords, as they help ensure the success of their current tenants and therefore the prompt payment of rental fees.
Both tenants and landlords often require support while evaluating lease documents and negotiating for the inclusion of protective terms, and that’s okay. Customized commercial leases often offer better protection for companies than broad leases with generic terms.
