Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
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CCIM.COM November | December 2017 19 parties, allowing the anchor tenant to stop paying rent for the term and permitting the owner to regain its space to fill it with tenants. The buyout amount is negotiable and should ref lect the amount of rent the owner can expect to lose before it has new tenants occupying the space and paying rent. Other terms, such as a restriction on the owner's ability to lease space to a competitor of the anchor tenant for a specified time, may be included under the terms of the buyout. If the anchor tenant is attempting to assign its lease or sublet all or a portion of its premises, the owner should review the assign- ment sections of the lease. The owner may have some consent rights concerning the new tenants. Additionally, the owner will want to see if the original anchor tenant remains on the hook after an assignment or subletting. The owner will want to discover if there is a limitation of the amount of time the anchor tenant can be closed while it attempts to find a replacement tenant to assume the lease or sublet all or a portion of the premises. Plan for Renovations In addition, if a shopping center owner is dealt a lemon through an anchor tenant closure, it may want to try to make lemonade. As an example, since some anchor tenant spaces may look worn out, an owner may want to freshen up the space. Nationally, several shopping center owners faced with anchor tenant closures have converted their projects into mixed-use developments, usually combining retail, restaurants, housing, and offices. Another, perhaps simpler, approach is to renovate the vacant anchor tenant space and lease it to successful discount operators, such as TJ Maxx, Ross, and Burlington Coat Factory. Finally, given the recent news that companies such as Amazon will be leasing brick-and-mortar space in shopping centers, an owner may take the opportunity to integrate internet shopping with traditional mall shopping. The owner will stay on the lead- ing edge of the retail landscape. Dan Villalpando is partner at real estate-focused law firm Cox Castle Nicholson LLP in Los Angeles. Contact him at dvillalpando@coxcastle.com. "However, a dark space in excess of 50,000 sf may have a chilling effect on the overall success of a shopping center, so the owner may prefer to end the lease and regain control of its space." Life with The Pin Experience life with the pin. Visit www.ccim.com/benefits CCIM Institute provides its members with the most sophisticated knowledge, technology, and operational platform to power their business. CCIM Membership Benefits: Lifelong Learning Free and discounted courses covering crowdfunding, big data, and more. STDB The industry's best digital toolkit for market analysis. FindaCCIM.com and CCIM Connect An exclusive global network for business and industry intelligence. CIRE Magazine Subscribtion The award-winning publication that covers market trends and innovations. Affinity Provider Program Exclusive discounts on travel, tech tools, printing, and more. DealShare A database of listings not found anywhere else.