Lori Kilberg, partner

In a huge retail trend, retail centers are increasingly leasing space to non-traditional tenants such as physical therapy clinics, medical offices, urgent care centers, and educational institutions for satellite campuses. Last week, we talked about why this is a win-win from a business perspective.  Today, at the risk of being Debbie Downer, I want to remind people about potential legal pitfalls. (I am an attorney after all!)

Urgent Care It can be challenging to negotiate NTT leases. Make sure to get your legal counsel involved early. For starters, many shopping centers are restricted by their covenants to retail uses and existing leases may limit the landlord’s flexibility as to types of permitted uses. Secondly, development agreements/re-zoning agreements may impose restrictions on types of tenants and percentage of space to be occupied by various users. And lastly, co-tenancy provisions typically will not allow landlords to substitute NTTs for non-traditional tenants.

Even so, there are typically feasible solutions to these challenges if legal counsel is consulted early. At Hartman Simons, we continue to find creative solutions to these problems for our clients.

This continues to be an interesting trend to watch and even as the economy starts to pick up again, I don’t see these deals going away. Thoughts? Please feel free to post your comments.