Offer Compromise to Secure an Exclusive

Offer Compromise to Secure an Exclusive

If the owner of the shopping center where you want to lease space resists your demand for an exclusive, try this compromise: Agree that the exclusive will apply only to a specific part of the center. Note that this compromise works best in a large center. It’s less effective if the center is small, because a potential competitor could end up in another part of the center that’s located too close to your store.

You and the owner will have to agree on which part of the center the exclusive will apply to. If the lease says that your exclusive applies to that part of the center only, the owner will be in violation of the lease if it rents space in that part to a competing business that engages in a use that’s covered by your exclusive.

To avoid confusion or disputes over areas where your exclusive will apply, attach an exhibit to the lease that highlights the protected area.

To use this compromise, add the following language to your lease’s exclusive use clause:

Model Lease Language

Notwithstanding anything contained herein to the contrary, Tenant’s Exclusive Right shall apply only to that portion of the Shopping Center area of Exhibit [insert #], which is attached hereto and made a part hereof.

Expect a savvy owner to want to exclude certain parties from your exclusive—such as existing tenants in the part of the center where your exclusive applies, as well anchors or other big box retailers—because they won’t accept restrictions on what they can sell. You’ll probably have to agree to those exceptions.

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