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Time to Take Closer Look at Incentivizing Provisions for Commercial Real Estate Tenants’ Leases

Welcome to our firm’s new Florida Real Estate Lawyer blog. Since 1977, our law firm has successfully advanced the business and legal interests of thousands of real estate developers, owners, landlords, tenants, sellers, buyers and lenders in Florida as well as nationally and internationally. We look forward to making this blog one of the premier sources for legal insight into the issues and challenges affecting the real estate industry in the state, and we encourage industry followers to enter their e-mail address in the box on the right in order to automatically receive all of our future posts.

Over the years, part of our practice has focused on the representation of landlords, tenants and lenders in issues related to the leasing of commercial properties, both on the negotiation side as well as enforcement. Prior to the recession, commercial landlords were negotiating shopping-center leases as quickly as they could build the centers, and they were willing to compromise on a variety of lease provisions to get the deals done.

Mall photo 1.jpgDuring those boom times, many landlords agreed to broad co-tenancy provisions that allowed tenants to terminate their leases if other spaces in the center were not filled or became vacant. In addition, these landlords relented on a continuous operation requirement, as they felt confident that the tenants’ businesses would thrive at these well-located new centers, even if their expenses were high.

Unfortunately, when the recession hit and tenants could no longer afford to operate in these locations, their ability to cease operation, or go dark, took a heavy toll on the owners and operators of the properties. It essentially had a snowball effect that slowly exacerbated the meltdown in the real estate sector that was brought on by the sputtering economy.

With commercial leasing picking up again, our real estate attorneys in South Florida are working closely with property owners/landlords to help them to re-examine their lease provisions so that they will be better equipped to avoid these and other potential pitfalls in the future. As leasing opportunities ramp up, take a look at your form and see if you are protected should we face another economic downturn.