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
- Party information — legal names, entity types, notice addresses for Landlord and Tenant
- Premises description — unit number, address, center name, square footage (usable vs. GLA)
- Lease term — commencement trigger (execution / delivery / opening), expiration, free-rent periods
- Rent structure — base rent, escalation type, percentage rent rate and breakpoint
- Tenant improvements — delivery condition, TI allowance amount, construction timeline
- 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
1---2name: retail-lease-agreement3description: Drafts a U.S. retail lease agreement for shopping center or commercial property tenancies, covering base rent, percentage rent with gross sales definitions, CAM charges, continuous operation obligations, tenant improvement allowances, exclusive use clauses, radius restrictions, and default/remedies provisions. Use when drafting or negotiating retail leases, shopping center leases, or commercial storefront tenancy agreements. Trigger keywords: retail lease, shopping center lease, percentage rent, CAM charges, gross sales, exclusive use, radius restriction, tenant improvement allowance, triple net.4---5
6# Retail Lease Agreement
7
8Drafts a balanced retail lease for shopping center or commercial property tenancies covering financial, operational, and protective provisions for both landlord and tenant.
9
10## Prerequisites
11
121. **Party information** — legal names, entity types, notice addresses for Landlord and Tenant
132. **Premises description** — unit number, address, center name, square footage (usable vs. GLA)
143. **Lease term** — commencement trigger (execution / delivery / opening), expiration, free-rent periods
154. **Rent structure** — base rent, escalation type, percentage rent rate and breakpoint
165. **Tenant improvements** — delivery condition, TI allowance amount, construction timeline
176. **Negotiated deal points** — exclusive use scope, radius restriction distance, CAM cap, merchants' association
18
19## Output Structure
20
21Draft sections in order. Populate from deal terms only — do not invent figures.
22
23### 1. Parties & Premises
24
25- Legal names, entity type, notice addresses
26- Premises: unit, address, center name, SF basis (usable / GLA), included common areas
27
28### 2. Lease Term & Commencement
29
30- Start trigger, expiration date
31- Rent abatement (within term or extends term — specify)
32- Landlord delivery deadline; Tenant opening deadline
33
34### 3. Base Rent & Escalations
35
36| Period | Annual Rent | Monthly Rent | Escalation Basis |
37|--------|-------------|--------------|------------------|
38| Year 1 | [_] | [_] | Fixed |
39| Year 2+ | [_] | [_] | Fixed % / CPI / FMV reset |
40
41Payment: due 1st of month; remittance address/account; late fee and grace period.
42
43### 4. Percentage Rent
44
45- Rate: __% of Gross Sales
46- Natural breakpoint = Base Rent ÷ Rate (or negotiated fixed breakpoint — specify which)
47- Calculation period: monthly / quarterly / annual
48- Reporting: within __ days after each period; annual certified statement
49- Landlord audit rights: __ days notice; Tenant maintains records __ years
50
51**Gross Sales — Include:** all revenues from business in/on/from Premises (cash, credit, layaway, online orders fulfilled from Premises, gift card redemptions, vending/kiosk)
52
53**Gross Sales — Exclude:** returns/refunds, sales tax remitted, employee discounts (cap __%), insurance proceeds for damaged/stolen goods, fixture/equipment sales not in ordinary course
54
55### 5. Additional Rent (Triple-Net Pass-Throughs)
56
57| Charge | Share Basis | Cap / Exclusions |
58|--------|-------------|------------------|
59| CAM | Pro-rata (Premises SF ÷ total GLA) | Annual increase cap: __%; exclude capital items with useful life >1 yr |
60| Real Estate Taxes | Pro-rata | Include special assessments? [Y/N] |
61| Property Insurance | Pro-rata | Landlord maintains building/CA policy; Tenant pays share |
62
63Reconciliation: annual statement within __ days of year-end; Tenant audit right on __ days notice.
64
65**Tenant's Own Insurance (Tenant's sole cost):**
66- CGL: $__M per occurrence / $__M aggregate
67- Property/contents: replacement value
68- Business interruption: __ months
69
70### 6. Permitted Use & Continuous Operation
71
72- **Permitted Use:** exact description of products/services and trade name — no broad categories
73- **Continuous Operation:** operate during all hours center is open to public
74- **Dark store remedy:** percentage rent adjustment / termination right / liquidated damages — specify
75- **Permitted closures:** casualty restoration, force majeure, remodeling with Landlord approval (max __ days)
76
77### 7. Premises Delivery & Tenant Improvements
78
79**Delivery Condition:** As-is / Broom clean / Vanilla box (HVAC, electrical, plumbing stubbed)
80
81**TI Allowance:**
82
83| Element | Value |
84|---------|-------|
85| Amount | $__ PSF / $__ total |
86| Eligible costs | Hard construction; architectural fees / permits / PM (specify) |
87| Disbursement | Paid invoices + unconditional lien waivers; Landlord pays within __ days |
88| Expiration | Forfeited if not drawn by __ |
89
90**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.
91
92### 8. Signage
93
94- Exterior, window, and illuminated signage requires prior written Landlord approval
95- Comply with center signage criteria, local zoning, and design guidelines
96- Tenant bears all fabrication, installation, maintenance, and removal costs
97
98### 9. Exclusive Use & Radius Restriction
99
100**Exclusive Use (if negotiated):**
101
102| Element | Value |
103|---------|-------|
104| Protected category | [specific products/services] |
105| Scope | Entire center / Inline only (excludes anchors/pads) |
106| Carve-outs | Existing tenants as of Lease Date; de minimis (<__% of sales) |
107
108**Radius Restriction (if negotiated):**
109
110| Element | Value |
111|---------|-------|
112| Radius | __ miles from Premises |
113| Duration | Coterminous with Lease (+ __ months post-expiration if negotiated) |
114| Scope | All locations / Same trade name or ownership only |
115
116### 10. Default & Remedies
117
118| Default Type | Notice | Cure Period |
119|-------------|--------|-------------|
120| Monetary | Written | __ days (typically 5–10) |
121| Non-monetary (curable) | Written | 30 days; extended if cure diligently pursued |
122| Non-monetary (incurable) | Written | None |
123
124**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.
125
126Verify remedies comply with applicable state landlord-tenant law. Do not include unenforceable penalty provisions. `[VERIFY]`
127
128### 11. Standard Commercial Provisions
129
130- Assignment/subletting: Landlord consent required; reasonable criteria
131- Maintenance: Tenant → interior; Landlord → structure, roof, common areas
132- Indemnification: mutual, based on respective negligence/willful misconduct
133- Casualty/condemnation: restoration obligations and termination thresholds
134- SNDA (subordination, non-disturbance, attornment)
135- Estoppel certificates: deliver within __ days of request
136- Merchants' association: dues $__ initial; adjustment mechanism __
137- Dispute resolution: Litigation / Arbitration (AAA Commercial Rules)
138- Governing law: State of __
139
140### 12. Signature Blocks
141
142- Authorized signatories with title and date for each party
143- Corporate authority recitals for entity parties
144- Notarization / witness lines if required by state law or for recording
145
146## Guidelines
147
148- **Gross Sales definition** is the most heavily negotiated provision — flag online/omnichannel sales attribution ambiguities for client review
149- **CAM exclusions**: confirm whether management fees are capped (commonly 10–15% of CAM) and whether capital replacements are excluded or amortized
150- **Continuous operation** may be unenforceable as specific performance in some jurisdictions — consider liquidated damages alternative `[VERIFY]`
151- **ADA compliance** responsibility must be allocated explicitly (common area vs. Premises interior)
152- **TI disbursements**: confirm lien waiver requirements comply with state mechanics' lien statutes `[VERIFY]`
153- **Percentage rent breakpoints**: distinguish natural (Base Rent ÷ Rate) from artificial (negotiated fixed) — document which applies
154- Tag jurisdiction-specific citations with `[VERIFY]` when accuracy is uncertain
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