New York City Commercial Leasing provides information on leasing commercial space & commercial real estate in New York City.








































































































For many years, commercial leases - business leases for office, retail, store, shopping center, professional, medical, warehouse, and industrial space - consisted mostly of standard clauses and were generally no longer than 20 pages. That is no longer the case. In the early 1980s, in response to dramatic shifts in the economic environment, commercial leases rapidly morphed into huge and sophisticated documents which quickly became known as "killer leases." Many extend to more than two hundred pages.

While these "killer leases" still cover the subject matter included in the older forms, they do so with a depth, subtlety, and craftiness which had not been seen before. They now include new and complex concepts and come with long exhibits, schedules and appendices, such as work letter agreements and construction specifications.

"Killer leases" were initially a New York City phenomenon, but they have now taken up residence in many other parts of the country. Reflecting the economic realities of most commercial leasing transactions, these documents are usually drafted to shift the landlord's costs and risks onto the tenant, while at the same time extracting profits (often subtly hidden) for the landlord. They are dynamic instruments which cross many business dimensions and incorporate multiple business and professional disciplines.

All too often, business entities leasing commercial space for the first time or reorganizing their older leasing programs, whether in New York City or any other major commercial and financial center, do not fully grasp the ramifications of these "killer leases." Because of their extreme complexity and subtlety (not to mention their extreme length), they have the potential to subject the unwary tenant, or even its affiliates, to local jurisdiction or "doing business" responsibilities, tax and regulatory obligations, and other liabilities in ways the tenant never contemplated. For example, a parent company guarantee issued from another state or country to secure a lease might cause "doing business" impacts on the non-tenant entity. Leases can be serious tools for cash flow and financing and are often "hell or high water" financing instruments securing imbedded loans or other funding obligations. Depending on how it is drafted, a single lease might be a major asset or a frightening liability. It can provide for or deny a workable exit strategy. It can facilitate or become an impediment to mortgage or other financing transactions. It can even completely block the sale or transformation of a business.

Commercial leases can profoundly affect both daily and long-term business operations, and they can determine the ultimate financial fate of entire business entities. Clearly, the understanding, negotiation, and drafting of commercial leases is of vital concern for businesses. This is no "do-it-yourself" project. Proper professional attention and expertise is absolutely required to guide a tenant through the complex negotiation and documentation of today's "killer lease."