The lease should not provide any tenant right of approval or other limitation on the landlord's ability to sell the property. An exception might occur in cases where the tenant holds a right of first refusal or option to purchase.

This is rare, but does arise in cases where the tenant leases the entire building, or is the major anchor tenant of the site. Additionally, the lease should provide that sale of the property releases the landlord from any further liability under the lease.

GlobeSt.com: How does the current economy affect developers or landlords' willingness to grant tenants co-tenancy leases?

Simons: In a downward economy, retailers are more insistent on protections afforded by co-tenancy and there is more pressure on landlords to grant it. In a strong economy when active retailers transact more deals, tenants are more lenient on co-tenancy protections.

GlobeSt.com: What considerations should be taken when drafting co-tenancy provisions?

Simons: First, be as specific and precise as possible to avoid ambiguity with co-tenancy provisions. They must be clear to the draftsman and all parties involved.

Second, from the landlord's standpoint, be as broad as possible by way of naming categories of tenants as opposed to specific tenants. Third, avoid hard size requirements.

GlobeSt.com: In new developments, what precautions should the developer exercise in negotiating leases of potential co-tenants?

Simons: It is absolutely true, but not realistic, that the developer should secure both an opening requirement and an operating covenant so they can require co-tenants to open before a certain date and have co-tenants open simultaneously. If that's not possible, the landlord will want the ability to recapture the space to be able to locate and lease to a substitute tenant. It is imperative for the landlord to secure a recapture right.

ATLANTA—Retail is clearly evolving with the rise of e-commerce. Co-tenancy clauses have emerged as more common in the midst of the transformation.

GlobeSt.com caught up with Bob Simons, a partner with commercial real estate firm Hartman Simons, to get his insights into what landlords really need to know about co-tenancy clauses. You can still read part one of this interview: The Strategic Clause Found In More Real Leases Today.

GlobeSt.com: What happens when co-tenancy provisions are tied to the property that the landlord doesn't own or control or the landlord sells the property after having granted co-tenancy?

Simons: Most leases contain rights of the landlord to sell or finance the property. However, it is important to ensure the provisions grant the landlord adequate rights and protection in the case of either activity.

The lease should not provide any tenant right of approval or other limitation on the landlord's ability to sell the property. An exception might occur in cases where the tenant holds a right of first refusal or option to purchase.

This is rare, but does arise in cases where the tenant leases the entire building, or is the major anchor tenant of the site. Additionally, the lease should provide that sale of the property releases the landlord from any further liability under the lease.

GlobeSt.com: How does the current economy affect developers or landlords' willingness to grant tenants co-tenancy leases?

Simons: In a downward economy, retailers are more insistent on protections afforded by co-tenancy and there is more pressure on landlords to grant it. In a strong economy when active retailers transact more deals, tenants are more lenient on co-tenancy protections.

GlobeSt.com: What considerations should be taken when drafting co-tenancy provisions?

Simons: First, be as specific and precise as possible to avoid ambiguity with co-tenancy provisions. They must be clear to the draftsman and all parties involved.

Second, from the landlord's standpoint, be as broad as possible by way of naming categories of tenants as opposed to specific tenants. Third, avoid hard size requirements.

GlobeSt.com: In new developments, what precautions should the developer exercise in negotiating leases of potential co-tenants?

Simons: It is absolutely true, but not realistic, that the developer should secure both an opening requirement and an operating covenant so they can require co-tenants to open before a certain date and have co-tenants open simultaneously. If that's not possible, the landlord will want the ability to recapture the space to be able to locate and lease to a substitute tenant. It is imperative for the landlord to secure a recapture right.