Bargaining Leverage: Tenant or Landlord

The outcome in lease negotiations between the landlord and retailer is largely determined by leverage. A number of factors determine who has the most bargaining power including:

• Strength of tenant’s financials.
• Tenant’s operating experience.
• Effect on the “tenant mix” and customer traffic within the shopping center
• Size of the premises leased.
• Availability of alternative tenants for the same location.
• Existing success of the shopping center without the tenant.
• Perceived desirability by landlord of tenant’s use to shopping center.

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