We SeLL All (“WE”) – a “dollar” type concept is a tenant in the landlord’s strip

Question

We SeLL All (“WE”) – a “dollar” type concept is a tenant in the landlord’s strip mall. It just completed 2 months into the 3 rd year of a 5 year lease for a 1,500 sf. store. It pays basic rent of $50,000.00 per year, triple net of $2.25 per sf. and percentage rent of 5.25% of sales above the threshold of $100,000.00. WE’s sales for the first year were $130,000.00, the second year $145,000.00, and it is projecting sales of $140,000.00 for the third year. Original sales projections for this store were $200,00.00 to $250,000.00 per year. Tenant comes to the landlord and requests help due to its not meeting sales projections and WE cannot afford to keep the store open. The lease has a continuous operating clause. A meeting is scheduled with the tenant for next week. The landlord gives this project to you to determine what should it do? Landlord does not want to lose the tenant, as tenant is paying market rent and CAM. What alternatives would you recommend the landlord consider and why?

Explanation / Answer

The landlord does not want to lose the tenant,as tenant is paying market rent and CAM .But for tenant he getting loss of $60,000 to $100,000 per year. So, if the landlord make the loss into profit for tenant then tenant wish to stay there.

so,landlord has to change the environment according to the benificial of tenant and by giving free publicity the tenant may get profit and he wish to stay there.So, in the next week meeting with the tenant the landlord has to say his plan to get benificial in sales and convience the tenant to give some time.

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