Set Up Compromise to Get Exclusive at Center

December 12, 2013
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It’s important to negotiate effectively if you want to obtain an exclusive use to provide a specific service at the shopping center where you are considering leasing space. Suppose you demand the exclusive right to sell a certain product or service at your center, but the owner resists giving in to your demand. How can you persuade the owner to give you an exclusive? Understanding the owner’s perspective and considering the following points will go a long way in negotiating an exclusive.

Center Owner’s View

The owner will most likely respond to your request for an exclusive that keeping track of exclusives can be an administrative nightmare. And it may add that it isn’t fair that you be allowed to sue the owner if a rogue tenant at the center decides to violate your exclusive. Also, the owner may argue that it knows better than you do which mix of tenants is best for the center, so your exclusive should not be allowed to limit its choice of tenants.

For your part, remind the owner that you need an exclusive because it protects your business from competition at the center. Your market may be limited. And permitting a new tenant at the center to tap into your market could severely harm your business at the center.

Agree to Limit Right

You can compromise with the owner by agreeing that your exclusive will be limited to a specific part of the center—for instance, the stores in only the wing of the center where you operate your business. Or if you are located indoors, the exclusive might apply only to indoor spaces, and not to any outparcels. This compromise gives you some protection against competition, rather than none; it also gives the owner some flexibility to lease to your competitors in more distant parts of the center. To get this win-win situation, and avoid confusion or disputes over areas where your exclusive will apply, attach an exhibit to the lease that highlights the protected area. Ask your attorney about adding this 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.

 

 

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