Structuring the Co-Tenancy - Avoiding the Self-Fulfilling Prophecy
Mondaq Business Briefing › United States Law Articles in English (2003)
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Structuring the Co-Tenancy - Avoiding the Self-Fulfilling Prophecy
By D. Albert Daspin and James H. Marshall III
In response to the advent of "new urbanism" and the nostalgia for the downtown retail experience of yesteryear, developers are fashioning lifestyle shopping centers, main street developments and town square projects. Such projects are configured in an open-air format, with quaint storefronts, ornamental street signs and lampposts, cobblestone sidewalks, and convenient parking, all intended to evoke the casual, charming and intimate shopping environment of days gone by. Notably absent from such projects, however, is the traditional big box anchor tenant. In lieu of such traditional anchors, an elite, but ever-expanding, cadre of upscale specialty retailers serve as the mainstay of such anchorless projects. However, these tenants are typically unwilling to act as a traditional anchor tenant, as they are not true destination tenants, and will depend on shopping center synergies to fuel their retail success to a far greater extent than traditional anchor stores. Accordingly, such tenants customarily demand the presence of a critical mass of favorable tenants, both at the scheduled opening date and throughout the term of the lease. As a result, such retailers are seeking and securing opening and continuing co-tenancy protections.Co-Tenancies GenerallyA co-tenancy can take two ...See the full content of this document
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