The Exit Strategy

When a tenant enters into a long-term lease obligation, all of the thoughts and questions are generally positive: “How much money will I make?” “How will I expand my business?” “How will I add new employees to my business?” However, equally as important are questions that are slightly more negative, such as, “Will I be able to terminate the lease if my sales are less than expected?” “Will I be able to assign this lease to another entity if I want to sell my business?” “Will I be able to terminate the lease if there is a casualty, including a fire, in the premises or retail facilities near the end of the term, so that I will not need to rebuild the premises following such casualty?” This article addresses different ways that these types of questions and issues can be addressed by tenants in order to create “exit strategies” for their lease obligations.