Many retailers and landlords were caught off guard during the pandemic. With no modern precedent for any such event and no history of the government implementing the widespread closure of private businesses for an extended period of time, there was no guidance on how to proceed with the lease agreement. Should tenants get full rent abatement? Rent deferral? Nothing, a combination? The response varied wildly from tenant to tenant, but moving forward, tenants are looking to establish game rules in advance. Provisions addressing a future government-forced closure of businesses are becoming popular in new retail leases.

“Retail tenants are asking for some form of pre-negotiated rent abatement or rent deferral in the event of a forced government shut down of retail operations,” Russ Arouh, co-chair of the industrial and warehouse industry team at Arnall Golden Gregory, tells GlobeSt.com.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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