Quote:
Originally Posted by BrianL99
I'm not sure how anyone would know the terms of PetSense's lease, unless they were a party to the transaction?
I believe PetSense has been open about 5 years now? A typical Retail Lease would be for a 5 year term, with at least 1 or 2 Options to renew in 5 year increments, at a known rent. That would mean that Pet Sense would have known exactly how much their rent was going up at the 5 year mark.
Apparently, they weren't as successful as they thought they would be, hence they're not renewing their Lease.
The Developer is not responsible for PetSense not meeting their expectations and leaving, PetSense is responsible.
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Knowing retail leases, this is the way MOST leases are written. Also know that it is not uncommon for the lessor to take a percentage of sales. Usually varies by type of location, High traffic means more maintenance, and this is a way for the lessor to recapture the increased cost. I also know that lessors use a larger percentage of sales to help new stores build a clientele and will then offer a little cheaper rent during the first term of lease. This reduces the risk for the business. After the first lease term, the retailer will know if the location is a success before the actual rates are required and can make an informed decision on the lease renewal.