Leasing new space can be a stressful and expensive endeavor for any tenant, particularly the initial buildout phase. To ensure that a tenant will be able to build out its space in a timely fashion and in the manner it desires, there are a number of issues which should be addressed in the lease.
In a recent article for GlobeSt, partners Andrea Gendel and Benjamin Teig, both members of Pryor Cashman's Commercial + Retail Leasing practice, assess tenant considerations when negotiating a lease and explain how to avoid pitfalls related to landlord constraints on alterations that could cause delays, cost overruns and prevent tenants from constructing what they desire.
"Tenants should always negotiate that the landlord will reasonably approve all aspects of alterations," the authors wrote. "With that said, if a landlord insists that its approval of alterations affecting the building's structure, systems and/or exterior be in its 'sole' discretion, a tenant should, prior to execution of the lease, seek landlord's pre-approval of 'concept' or 'design' plans to attach as an exhibit to the lease, subject only to landlord's approval of a full set of construction drawings. If the construction drawings are in line with the pre-approved plans, the landlord should have no right to object, even to aspects that affect the building's structure, systems and/or exterior, so long as the construction drawings are substantially consistent with the pre-approved plans."
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