Formula Retail Ordinances have sprung up in select markets, and they can create an extra layer of challenges when leasing retail assets. In an effort to protect local and small businesses, new leases require planning clearance through the city. Brokerage firm Beta recently completed leasing Malibu Village, a 50,000-square-foot retail center in Malibu, which has this ordinance within its city limits.
"To get the lease approved by the city, a tenant can sign a lease if they have 10 or under retail locations," James Keefe, senior account manager at Beta, tells GlobeSt.com. "Once they have signed the lease they can open up additional stores over 10 but they must open in Malibu first before going over 10. The process then becomes more challenging due to the criteria as the tenants you begin to work with are less familiar with the leasing process so there is a more hands-on approach."
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