Feb
03

Co-Tenancy Could Lead to Retail Bankruptcy

By
– GlobeSt.com

As the list of store closings grows exponentially so does the pain felt by landlords because of a common but little known clause in retail leases. And with bankruptcies in the retail sector expected to spread as spending remains depressed, experts say these so-called co-tenancy clauses could drive landlords into bankruptcy along with many of their tenants.

The clauses allow store owners to take several options–including not paying rent–when key tenants leave a shopping center. The clauses sometimes make leases contingent on certain anchor tenants because those big-box stores often drive most of the traffic to smaller stores. Other options triggered by co-tenancy clauses can include lease termination, reduced rent for a certain period or payment of a percentage of sales only.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE:

http://www.globest.com/news/1339_1339/florida/176671-1.html
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