Before the pandemic, restaurants were among the most sought-after retail tenants, and even in a post-pandemic world, restaurants continue to perform well despite new challenges. It isn't surprising that apartment owners with ground-floor retail spaces would want to ink a restaurant tenant, but Gary Glick, a partner with Cox, Castle & Nicholson, says that apartment owners should make sure they are complying with space requirements first.

"It is critical to multi-family developers that their leases with food users with on-site cooking facilities require regular and adequate cleaning of all exhaust systems," Glick tells GlobeSt.com. "This cleaning should include degreasing of all hoods, fans, vents, pipes, flues and grease traps. In the event any food user fails to clean such systems, the landlord, upon written notice to such tenant, should have the right to arrange for the cleaning of such system, and the tenant should be required to reimburse the landlord for all of these costs."

Venting is also crucial, and while the burden falls on the tenant to comply, the landlord should ensure requirements are met in the lease structure. "Restaurants should be required to install proper venting and pollution control filtration systems, which may also be required by governmental requirements," says Glick. "Multifamily developers do not want any of their residential tenants to experience strong odors from restaurants in the project."