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retail-lease-agreement

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personAuthor: jakexiaohubgithub
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Retail Lease Agreement

Drafts a balanced retail lease for shopping center or commercial property tenancies covering financial, operational, and protective provisions for both landlord and tenant.

Prerequisites

  1. Party information — legal names, entity types, notice addresses for Landlord and Tenant
  2. Premises description — unit number, address, center name, square footage (usable vs. GLA)
  3. Lease term — commencement trigger (execution / delivery / opening), expiration, free-rent periods
  4. Rent structure — base rent, escalation type, percentage rent rate and breakpoint
  5. Tenant improvements — delivery condition, TI allowance amount, construction timeline
  6. Negotiated deal points — exclusive use scope, radius restriction distance, CAM cap, merchants' association

Output Structure

Draft sections in order. Populate from deal terms only — do not invent figures.

1. Parties & Premises

  • Legal names, entity type, notice addresses
  • Premises: unit, address, center name, SF basis (usable / GLA), included common areas

2. Lease Term & Commencement

  • Start trigger, expiration date
  • Rent abatement (within term or extends term — specify)
  • Landlord delivery deadline; Tenant opening deadline

3. Base Rent & Escalations

| Period | Annual Rent | Monthly Rent | Escalation Basis | |--------|-------------|--------------|------------------| | Year 1 | [] | [] | Fixed | | Year 2+ | [] | [] | Fixed % / CPI / FMV reset |

Payment: due 1st of month; remittance address/account; late fee and grace period.

4. Percentage Rent

  • Rate: __% of Gross Sales
  • Natural breakpoint = Base Rent ÷ Rate (or negotiated fixed breakpoint — specify which)
  • Calculation period: monthly / quarterly / annual
  • Reporting: within __ days after each period; annual certified statement
  • Landlord audit rights: __ days notice; Tenant maintains records __ years

Gross Sales — Include: all revenues from business in/on/from Premises (cash, credit, layaway, online orders fulfilled from Premises, gift card redemptions, vending/kiosk)

Gross Sales — Exclude: returns/refunds, sales tax remitted, employee discounts (cap __%), insurance proceeds for damaged/stolen goods, fixture/equipment sales not in ordinary course

5. Additional Rent (Triple-Net Pass-Throughs)

| Charge | Share Basis | Cap / Exclusions | |--------|-------------|------------------| | CAM | Pro-rata (Premises SF ÷ total GLA) | Annual increase cap: __%; exclude capital items with useful life >1 yr | | Real Estate Taxes | Pro-rata | Include special assessments? [Y/N] | | Property Insurance | Pro-rata | Landlord maintains building/CA policy; Tenant pays share |

Reconciliation: annual statement within __ days of year-end; Tenant audit right on __ days notice.

Tenant's Own Insurance (Tenant's sole cost):

  • CGL: $__M per occurrence / $__M aggregate
  • Property/contents: replacement value
  • Business interruption: __ months

6. Permitted Use & Continuous Operation

  • Permitted Use: exact description of products/services and trade name — no broad categories
  • Continuous Operation: operate during all hours center is open to public
  • Dark store remedy: percentage rent adjustment / termination right / liquidated damages — specify
  • Permitted closures: casualty restoration, force majeure, remodeling with Landlord approval (max __ days)

7. Premises Delivery & Tenant Improvements

Delivery Condition: As-is / Broom clean / Vanilla box (HVAC, electrical, plumbing stubbed)

TI Allowance:

| Element | Value | |---------|-------| | Amount | $__ PSF / $__ total | | Eligible costs | Hard construction; architectural fees / permits / PM (specify) | | Disbursement | Paid invoices + unconditional lien waivers; Landlord pays within __ days | | Expiration | Forfeited if not drawn by __ |

Construction: Licensed/insured contractors; Landlord-approved plans; all permits and ADA compliance; completion __ days after delivery; open for business __ days after delivery. Delay carve-outs: force majeure and Landlord-caused delays (excusable); all others unexcused.

8. Signage

  • Exterior, window, and illuminated signage requires prior written Landlord approval
  • Comply with center signage criteria, local zoning, and design guidelines
  • Tenant bears all fabrication, installation, maintenance, and removal costs

9. Exclusive Use & Radius Restriction

Exclusive Use (if negotiated):

| Element | Value | |---------|-------| | Protected category | [specific products/services] | | Scope | Entire center / Inline only (excludes anchors/pads) | | Carve-outs | Existing tenants as of Lease Date; de minimis (<__% of sales) |

Radius Restriction (if negotiated):

| Element | Value | |---------|-------| | Radius | __ miles from Premises | | Duration | Coterminous with Lease (+ __ months post-expiration if negotiated) | | Scope | All locations / Same trade name or ownership only |

10. Default & Remedies

| Default Type | Notice | Cure Period | |-------------|--------|-------------| | Monetary | Written | __ days (typically 5–10) | | Non-monetary (curable) | Written | 30 days; extended if cure diligently pursued | | Non-monetary (incurable) | Written | None |

Landlord remedies: termination; re-entry/repossession; reletting on Tenant's account; damages = unpaid rent + reletting costs + unamortized TI + PV of remaining rent less reletting proceeds.

Verify remedies comply with applicable state landlord-tenant law. Do not include unenforceable penalty provisions. [VERIFY]

11. Standard Commercial Provisions

  • Assignment/subletting: Landlord consent required; reasonable criteria
  • Maintenance: Tenant → interior; Landlord → structure, roof, common areas
  • Indemnification: mutual, based on respective negligence/willful misconduct
  • Casualty/condemnation: restoration obligations and termination thresholds
  • SNDA (subordination, non-disturbance, attornment)
  • Estoppel certificates: deliver within __ days of request
  • Merchants' association: dues $__ initial; adjustment mechanism __
  • Dispute resolution: Litigation / Arbitration (AAA Commercial Rules)
  • Governing law: State of __

12. Signature Blocks

  • Authorized signatories with title and date for each party
  • Corporate authority recitals for entity parties
  • Notarization / witness lines if required by state law or for recording

Guidelines

  • Gross Sales definition is the most heavily negotiated provision — flag online/omnichannel sales attribution ambiguities for client review
  • CAM exclusions: confirm whether management fees are capped (commonly 10–15% of CAM) and whether capital replacements are excluded or amortized
  • Continuous operation may be unenforceable as specific performance in some jurisdictions — consider liquidated damages alternative [VERIFY]
  • ADA compliance responsibility must be allocated explicitly (common area vs. Premises interior)
  • TI disbursements: confirm lien waiver requirements comply with state mechanics' lien statutes [VERIFY]
  • Percentage rent breakpoints: distinguish natural (Base Rent ÷ Rate) from artificial (negotiated fixed) — document which applies
  • Tag jurisdiction-specific citations with [VERIFY] when accuracy is uncertain