Contents:

CHAPTER 1 Office Lease Fundamentals -1.01 Evolution of the Modern Office Lease—Emergence of the “Killer Lease” [1] The Past and Today [2] Issues for the Future -1.02 What Is a Lease? [1] Lease vs. License [2] Necessity of a Writing [3] Elements Required for Enforceability [4] Uniform Standards Toward a Fair Lease -1.03 Life of the Lease [1] Signing vs. Execution [2] Contract Interval Before Possession [3] Cancellation of the Lease [4] Conditional Demising -1.04 Office Lease Provisions [1] In General [2] Checklist of Lease Provisions [3] Omission of Terms -1.05 Drafting and Analysis Basics [1] Interpreting Definition Pyramids [2] Following Lease Time Lines [3] Precision Drafting [4] Long Range Planning -1.06 Summary CHAPTER 2 Who Is the Landlord and Who Is the Tenant? -2.01 Who Has Authority to Sign the Lease? -2.02 Who Is the Landlord? [1] In General [2] Ground Leases [3] Landlord as Assemblage Owner [4] Partnership or Corporation as Landlord -2.03 Who Is the Tenant? -2.04 Limitations on Landlord's Authority -2.05 Title Insurance -2.06 Covenant and Representation of Authority of Tenant -2.07 Summary CHAPTER 3 The Leased Premises -3.01 Description of Demised Premises -3.02 Measurement Standards -3.03 Space Maintenance and Repair Obligations -3.04 Compliance and Safety [1] Compliance with the Laws [2] Building Safety -3.05 Summary CHAPTER 4 The Lease Terms -4.01 Commencement of the Lease Terms [1] Dating the Lease [2] Possession for Occupancy Terms [3] Demising Term [4] Rental Term -4.02 Abatements and Concessions [1] Rental Abatements [2] Concessions for Alterations [3] Recapture of Abatements or Concessions [4] Recapturing the Cost of Tenant Improvements and Leasing Commissions -4.03 Phased in Possession or Occupancy -4.04 End of the Term -4.05 Condition of the Premises -4.06 Summary CHAPTER 4A Security Deposits and Other Forms of Security -4A.01 Introduction [1] General [2] Amount of Security [3] Transfer of Security [4] Assignment of Lease [5] General Tenant Concerns -4A.02 Kinds of Security [1] Introduction [2] Cash Security [3] Letters of Credit [4] Guaranties [5] Bonds [6] Accounts Receivable as Security [7] Landlordms Lien on Tenant's Property [8] Securities and Stock as Pledged Security CHAPTER 5 Preparing the Premises for Occupancy -5.01 Prioritizing Landlord's and Tenant's Work -5.02 Control of the Work Site -5.03 Inspecting and Monitoring Work Quality -5.04 Right to Exclude Landlord -5.05 Summary CHAPTER 6 Landlord Access -6.01 Building Systems and Compliance -6.02 Landlord Access to Premises -6.03 Emergency vs. Security -6.04 Interference and Business Interruption -6.05 Summary CHAPTER 7 Area -7.01 Usable Area -7.02 Rentable -7.03 Carpetable Area -7.04 Loss Factors -7.05 Measuring Additional or Option Space -7.06 Remeasurement -7.07 Measurement Representations and Proportionate Shares -7.08 Limiting Tenant's Proportionate Share -7.09 Sum of the Demised Premises -7.10 Stand Alone Areas [1] Expanding the Definition of “Land” [2] Tax Lots [3] Retail and Garage Areas -7.11 Summary CHAPTER 8 Use -8.01 Types of Uses [1] In General [2] “Any Lawful Use” [3] Specific or Mandatory [4] Special Designations [5] Exclusionary Use and Exclusives -8.02 Zoning or Building Use Laws -8.03 No Representations—Permissive Use -8.04 Failure of Essential Purpose -8.05 Summary CHAPTER 9 Appurtenances -9.01 Common Areas [1] In General [2] Use of the Common Areas [3] Loading Areas [4] Elevators [5] Sidewalks [6] Storage and Vaults [7] Parking [8] Cooling Towers and Mechanical Rooms [9] Roofs [10] Common Area Maintenance Costs -9.02 Directory and Signs -9.03 Building Systems, Fixtures and Improvements [1] In General [2] Air Conditioning, Ventilation and Heating [3] Electrical [4] Security Systems and Fire Command [5] Ownership of Improvements [6] Abandoned Building System Areas -9.04 Impact on Additional Rentals -9.05 Summary CHAPTER 10 Repairs and Maintenance -10.01 Obligations of the Parties [1] Landlord Obligations [2] Tenant Obligations -10.02 Quality of Service -10.03 Self-Help Remedies -10.04 Repairs Necessitated by Preexisting Conditions [1] During Initial Tenant's Work [2] Future Repairs [3] Hazardous Materials—Risks and Remediation [4] Potential Landlord/Tenant Issues Involving Mold -10.05 Summary CHAPTER 11 Condemnation and Destruction -11.01 Condemnation [1] Takings in General [2] Valuation and Allocation of Award [3] Mortgagee's Interest in Condemnation Award [4] Viability Clause [5] Condemnation Clause -11.02 Destruction by Fire or Casualty [1] Insurance [2] Landlord's Obligation to Restore [3] Liability [4] Damage or Destruction Clause -11.02A Destruction by Force Majeure [1] In General [2] Sample Force Majeure Clauses [3] Terrorist Activities -11.03 Mortgagee's Interest in Insurance Proceeds -11.04 Rent Abatements During Condemnation or Destruction -11.05 Length of Restoration Period -11.06 Summary CHAPTER 12 Alteration -12.01 Initial Alterations [1] In General [2] Approvals and Consents [3] Permits, Violations and Certificates of Occupancy [4] Field Conditions [5] Delays and Hidden Costs [6] Building Conditions Preventing Alterations [7] Initial Construction Clause -12.02 Subsequent Alterations to the Premises [1] Landlord Resistance to Subsequent Alterations [2] Necessity for Subsequent Alterations [3] Subletting a Portion of the Premises -12.03 Monitoring Alterations and Compliance [1] Process and Documentation [2] Landlord Costs -12.04 Alterations Clauses [1] Oppressive Approach [2] Reasonable and Practical Approach [3] Model Approach -12.05 Summary CHAPTER 13 Compliance with Laws -13.01 In General -13.02 Compliance Obligations Within the Building [1] Responsibilities [2] Tenant Self-Help and Indemnities -13.03 Compliance Obligations Within the Premises [1] Circumscribing Responsibilities [2] Compliance Clauses [3] Impact on Permits and Improvements -13.04 Preexisting Noncompliance [1] Structural [2] Inclusion in Additional Rentals -13.05 Compliance Arising After Lease Commences -13.06 Major Substantive Compliance Areas [1] Environmental Issues in General [2] Asbestos [3] Sick Building Syndrome [4] Americans with Disabilities Act -13.07 Summary CHAPTER 14 Conditions of Limitation and Defaults -14.01 Operation of Condition of Limitation [1] Requirements for a Condition of Limitation [2] Equitable Relief [2A] Alternative Dispute Resolution [3] Notices [4] Condition of Limitation Clause -14.02 Defaults [1] Incurable Defaults [2] Performance or Monetary Defaults [3] Tenant Self-Help When Landlord Defaults [4] Landlord Self-Help When Tenant Defaults -14.03 Determination of Damages After Default and Termination [1] Under the Common Law [2] Under the “Killer Lease” [3] Statutory Provision for Termination and Remedies [4] Reletting and Mitigation of Damages [5] The “Good Guy” Clause -14.04 Summary CHAPTER 15 Reentry by Landlord -15.01 Emergency Access -15.02 Routine Access -15.03 Reentry as a Remedy -15.04 Consensual Reentry -15.05 Reentry to Security Areas -15.06 Summary CHAPTER 16 Services -16.01 Levels of Services [1] In General [2] Issues for Negotiation [3] Complex Services Clauses -16.02 Essential Services [1] Negotiating Specific Protections [2] Frustration or Failure of Essential Purpose [3] Self-Help and Abatements -16.03 Differing Levels of Services Among Tenants -16.04 Summary CHAPTER 16A Telecommunications Licenses and Leases in Commercial Properties -16A.01 Introduction and Scope -16A.02 The Regulatory Framework and Landscape [1] FCC Regulations [2] State Laws and Regulations [3] Local Regulatory Issues -16A.03 Perspective of Commercial Property Owner in Negotiating Terms of a Telecommunications License Agreement -16A.04 Key Terms of a Rooftop License or Telecommunications License Between the Property Owner and the Telecommunications Service Provider [1] Nature of the Agreement [2] Term and Fees [3] Relocation Rights [4] Access to the Building and Telecommunications Spaces [5] Plans, Construction, Installation and Alterations [6] Insurance and Subrogation [7] Indemnification [8] Electricity [9] Assignment [10] Interference [11] Subordination [12] Rights on Termination and Obligation to Remove Abandoned Cable [13] Miscellaneous Provisions -16A.05 Telecommunications Inside and Outside the Premises [1] In General [2] Form of Telecommunications License (for Rooftop Antenna) with Commentary CHAPTER 17 Electricity -17.01 Character of Electrical Services Available [1] Determination of Essential Information [2] Definition of Terms [3] Electrical Service Clauses -17.02 Cost of Electrical Services [1] Breakdown of Charges [2] Metering and Submetering [3] Electrical Services as Landlord Profit Centers [4] Profit-Maximizing Electricity Clause -17.03 Landlord's Exculpation -17.04 Summary CHAPTER 18 Custom of Dealing, Waivers and Modifications -18.01 Practices of the Parties [1] Requirement of a Writing to Amend Lease [2] Nonwaiver Provisions [3] Entire Agreement and No Waiver -18.02 Substance of Modifications and the Modification Agreement [1] Basic Principles [2] Form of Lease Modification Agreement -18.03 Informal Accommodations and Waivers -18.04 Summary CHAPTER 19 Rent -19.01 Office Lease Rent -19.02 Base Rent [1] Price per Square Foot [2] Analyzing Base Rent Components -19.03 Escalations [1] Net and “Not So Net” Leases [2] Cost Comparisons Between Buildings [3] Taxes [4] Operating Expenses [5] Tenant's Right to Audit [6] Monitoring Landlord's Escalation Calculations [7] Escalations Checklist -19.04 Consumer Price Index -19.05 Rent Concessions [1] In General [2] Below Market and Free Rent [3] Work Allowances [4] Early Buyouts or Renegotiation [5] Government Participation [6] Other Rent Concessions [7] Pass Through Clauses [8] Transfer Rights [9] Equity Participation -19.06 Summary CHAPTER 20 Superior Interests -20.01 Superior Title Interests -20.02 Subordination Agreements [1] Impact of Subordination [2] Agreement to Subordinate -20.02A Collateral Agreement with a Lender Nondisturbance Agreements [1] Importance and Purpose [2] Lender's Perspective [3] Negotiability [4] The Basic Nondisturbance Agreement [5] The Overkill Agreement [6] Landlord and Lender Requirements [7] Tenant Requirements -20.03 Attornment -20.04 Reasonable Contractual Requirements -20.05 Estoppel Certificates [1] Sample Estoppel Certificate [2] Landlord Uses [3] Tenant Pitfalls [4] Tenant's Wedge [5] Timing [6] Remedies [7] Landlord's Wedge [8] Benefits, Burdens and Protections -20.06 The Document Trap—Lease Amendment by Later Documents [1] Fee Mortgage Provisions from a Ground Lease [2] Proposed Subordination of Mortgage and Attornment Agreement [3] Revisions to Proposed Subordination of Mortgage and Attornment Agreement [4] Comments on Revisions to Proposed Subordination of Mortgage and Attornment Agreement -20.07 Summary CHAPTER 21 Transferability of Leasehold Interests -21.01 Transferability [1] Rights to Assign or Sublease [2] Consent to Assign or Sublease [3] Standard of Reasonableness [4] Implied Reasonableness Standards [5] Interaction with the Use Clause [6] Tax Consequences of Assignments and Subleases [7] One State's Legislative Response—California [8] Free Assignability [9] Restricting Transfers and Other Changes in Control [10] Addition of Tenant Entity -21.02 Right to Acquire or Dispose of Space [1] Reacting to Business Cycles and Normal Growth [2] Excess Space [3] Landlord Recapture of Excess Space [4] Marketing the Excess Space [5] Sharing Profits with Landlord [6] Competitive Protections for Landlord -21.03 Summary CHAPTER 22 The Covenant of Quiet Enjoyment -22.01 Quiet Enjoyment [1] Scope [2] History of the Covenant -22.02 Construction of the Covenant [1] The Terms of the Covenant as Expressed in the Lease [2] Limiting the Landlord's Liability [3] Successor Rights and Obligations [4] Fairly Expressing the Covenant in the Lease -22.03 Theories of Liability [1] Actual Eviction [2] Constructive Eviction [3] Partial Constructive Eviction -22.04 Remedies for Breach of the Covenant of Quiet Enjoyment -22.05 Summary CHAPTER 23 Restrictive Clauses -23.01 Examples of Restrictive Clauses [1] Exclusives [2] Restrictive Covenants [3] Radius Clauses -23.02 Antitrust Implications [1] Under the Sherman Act in General [2] The Current Climate [3] Relevant Geographic Market [4] Relevant Product Market -23.03 Tortious Interference -23.04 Summary CHAPTER 24 Renewals and Options -24.01 Options to Renew or Extend [1] Why Obtain an Option? [2] Definitions [3] Essential Option Terms [4] The Right to Renew [5] Timeliness of Exercise [6] Notice of Intention to Exercise Option [7] The Renewal Rate [8] Comments -24.02 Impact on Escalation Rentals -24.03 Holdover and Expansion Options [1] The Holdover Option [2] The Expansion Option [3] Operation of the Options -24.04 Purchase Options -24.05 Termination Options and Buyouts [1] Termination or Cancellation Options [2] Buyouts -24.06 Summary CHAPTER 25 Casualty and Insurance -25.01 Allocation of Risks and Responsibilities [1] Introduction [2] Common Law Standards [3] The “Hub and Spokes” View of Casualty and Insurance -25.02 Modern Liability [1] In General [2] Tort [3] Contract or Lease Covenant [4] Indemnification [5] Vicarious Liability [6] Fraud or Misrepresentation [7] Environmental Insurance [8] Mold: The Associated Risks and Insurance Coverage -25.03 Types of Coverage [1] Property Coverage [2] Property Endorsements [3] Liability Coverage [4] Post 9-11 Changes [5] The Terrorism Risk Insurance Act of 2002 (TRIA) [6] Evidencing that Coverage Exists -25.04 Coinsurance [1] Express Coinsurance [2] Implied Coinsurance -25.05 Subrogation and Waivers of Subrogation [1] Principles of Subrogation Law [2] Waivers of Subrogation -25.06 Indemnification and Exculpatory Clauses -25.07 The “No Fault” Approach [1] In General [2] A Sample “No Fault” Clause -25.08 Summary CHAPTER 26 Work Letters -26.01 Preparing the Work Letter [1] Importance of a Work Letter [2] Essential Definitions [3] Conditions Existing Within Demised Premises [4] Materials and Labor Provided by the Landlord [5] “Turn Key” Work Letter [6] Timing Concerns [7] Landlord Involvement with Tenant's Plans and Specifications [8] Landlord Credits in a “Modified Turn Key” [9] Effective Use of Consultants -26.02 Insulating the Parties from Liability [1] Unanticipated Claims and Liens [2] Distancing the Parties from Project Control [3] Contractor Agreements -26.03 Summary CHAPTER 27 Financing Real Estate Development Through Participation Leases -27.01 Introduction -27.02 How Participation Leases Work [1] What Is a Participation Lease? [2] Working with the Numbers: An Example [3] Landlord Benefits [4] Tenant Benefits -27.03 Structuring an Equity Participation [1] Joint Venture and Lease [2] Phantom Equity Arrangements [3] Condominiums [4] Tenants-in-Common Arrangements [5] Special Leases -27.04 Environmental Concerns -27.05 Summary CHAPTER 27A Synthetic Lease Transactions and “Off-Balance Sheet” Financing -27A.01 Introduction -27A.02 Accounting Literature [1] SFAS No. 13 (Classification of Leases) [2] SFAS No. 98, EITF No. 96-21 and EITF No. 97-10 (Sale-Leaseback Accounting Treatment) [3] EITF 90-15 and EITF Exposure Draft (Revised) No. 194-B (Consolidation Rules) -27A.03 Tax Considerations -27A.04 Detailed Description of Synthetic Lease Structure [1] Lessee [2] Lessor [3] Construction of Improvements [4] Debt and Equity Structure -27A.05 Provisions of a Synthetic Lease [1] Triple Net, Bond-Type Lease [2] Lease Term and Financing Term [3] Rights and Obligations at Lease Expiration [5] Rent [6] Defaults [7] Indemnities -27A.06 Conclusion CHAPTER 28 Bankruptcy -28.01 How Bankruptcy Works [1] Overview of Statutory Provisions [2] Timing -28.02 Creditor Remedies -28.03 Assumption and Rejection [1] General Principles [2] What Happens When a Debtor Decides to Assume or Reject a Lease? [3] Rejection of Lease by Tenant [4] Assumption of the Lease by the Tenant—Adequate Assurance [5] Shopping Center Leases—A Special Case [6] The Effect of the Automatic Stay [7] No Extension and No Action Taken [8] The Post-Petition/Pre-Rejection or Assumption Period -28.04 Bankruptcy Provisions in Leases [1] Ipso Facto Clauses [2] Sample Bankruptcy Clause -28.05 Assignment [1] In General [2] Invalidity of Restrictions on Assignment [3] Contesting a Proposed Assignment of Lease by the Trustee [4] Assignment of Shopping Center Leases -28.06 The Landlord as Debtor -28.07 Impact of Bankruptcy on Guaranties -28.08 What to Do When a Petition Is Filed -28.09 Bankruptcy Code Amendments [1] The Bankruptcy Reform Act of 1994 [2] The 2005 Bankruptcy Act Amendments -28.10 Summary CHAPTER 28A Can You Draft a Fair Lease? -28A.01 Introduction -28A.02 Traditional Clauses [1] Who Are the Parties? [2] What Are the Premises? [3] Does the Building Exist When the Lease Is Signed? [4] How Long Should the Term of the Lease Be? [5] What Is a Fair Rent? -28A.03 The Premises -28A.04 Transfer of Interest -28A.05 Remedies -28A.06 Getting the Lease Signed CHAPTER 28B Tenant's Checklist of Silent Lease Issues -28B.01 Introduction [1] Genesis of the Checklist [2] What the Checklist Is and Does -28B.02 Tenant's Checklist of Silent Lease Issues CHAPTER 28C Landlord's Checklist of Silent Lease Issues -28C.01 Introduction -28C.02 What the Checklist Is and Does [1] Does the Checklist Give Landlords an Unfair Advantage? [2] Intended for Major Commercial Space Leases [3] Caveats, Warnings, Disclosures [4] Notes on Style [5] Written from the Landlord's Perspective -28C.03 The Landlord's Checklist CHAPTER 29 Negotiating the Lease -29.01 Negotiation Basics [1] In General [2] Negotiating Techniques -29.02 Negotiation Players [1] Developer [2] Real Estate Consultant [3] Real Estate Brokers [4] Advertising Company [5] Tenant's Representatives [6] Architects, Designers and Engineers [7] Attorneys -29.03 Negotiation Objectives [1] Landlord's Objectives [2] Tenant's Objectives -29.04 Net Present Value Analysis [1] Terms of Potential Deals Under Consideration [2] Method of Comparison for Competing Properties -29.05 Negotiation Process [1] Preliminary Preparation [2] Interaction of Negotiation Participants [3] Threshold Negotiation Points [4] Tenant's Proposal Letter [5] Letter of Intent [6] Exchanging Lease Drafts [7] Comment Letter [8] Finalizing the Negotiation [9] Work Letter and Working Drawings -29.06 A Study of Negotiating Strategies and Styles -29.07 Summary CHAPTER 29A Lease Brokerage -29A.01 General Considerations -29A.02 Basic Provisions of the Leasing Brokerage Agreement -29A.03 The Leasing Situation: Creation of the Leasehold -29A.04 The Calculation of Commission [1] Base Rent [2] Additional Rent: Reimbursement of Landlord's Costs [3] Additional Rent: Percentage Rent [4] Additional Commission-Generating Events -29A.05 Subleasing -29A.06 Other Transactions -29A.07 Lease Provisions Relating to Brokers -29A.08 Form of Brokerage Agreement for Services to a Landlord [1] Issues of Scope [2] Form of Brokerage Agreement -29A.09 Brokerage Services on Behalf of a Tenant [1] In General [2] Form of Brokerage Agreement for Services on Behalf of a Tenant CHAPTER 30 Subleasing -30.01 What Is a Sublease? [1] In General [2] Critical Distinction: Sublease or Assignment? [3] Key Issues to Consider When Negotiating the Terms of an Assignment or Sublease Clause -30.02 Limitations [1] Legal Limitations [2] Practical Limitations [3] Protecting a Tenant's Sublease Rights—The Importance of Nondisturbance and Recognition Agreements -30.03 The Sublease Document [1] Form of Sublease Agreement [2] Analysis of the Sublease Agreement [3] Additional Considerations—Retaining Parts of the Subleased Premises -30.04 Landlord's Consent to the Sublease [1] Generally [2] Forms of Landlord's Consent -30.05 Conclusion CHAPTER 31 Must a Commercial Landlord Act Reasonably When Responding to a Tenant's Assignment or Subletting Request? -31.01 Introduction -31.02 The Various State Laws and Views [1] Alabama [2] Alaska [3] Arizona [4] Arkansas [5] California [6] Colorado [7] Connecticut [8] Delaware [9] Florida [10] Georgia [11] Hawaii [12] Idaho [13] Illinois [14] Indiana [15] Iowa [16] Kansas [17] Kentucky [18] Louisiana [19] Maine [20] Maryland [21] Massachusetts [22] Michigan [23] Minnesota [24] Mississippi [25] Missouri [26] Montana [27] Nebraska [28] Nevada [29] New Hampshire [30] New Jersey [31] New Mexico [32] New York [33] North Carolina [34] North Dakota [35] Ohio [36] Oklahoma [37] Oregon [38] Pennsylvania [39] Rhode Island [40] South Carolina [41] South Dakota [42] Tennessee [43] Texas [44] Utah [45] Vermont [46] Virginia [47] Washington [48] Washington, D.C. [49] West Virginia [50] Wisconsin [51] Wyoming -31.03 Jurisdictional Table Covering the State Views on a Tenant's Right to Assign or Sublease CHAPTER 32 Preparing for an Effective Subleasing Program While Negotiating the Lease -32.01 Introduction -32.02 Remarketing Issues [1] The Ability to Market and Offer Space with a Minimum of Lead Time, Pricing Limitations and Other Regulation by the Landlord [2] The Ability to Eliminate the Need for the Landlord's Consent or Assure Consent Quickly When the Landlord's Consent Is Required [3] The Ability to Trigger Consent Through Intentions Rather than Formal Offers or Fully Executed Sublease Documents [4] The Ability to Offer Space Through Commercial Channels of the Tenant's Choice Without the Landlord's Interference or Limitations [5] The Ability to Demise, Alter and Install Fixtures in the Space Without Inappropriate Limitations, Roadblocks or Delayed Landlord Consents [6] The Ability to Preclude Landlord Limitations on or Added Criterion for Pricing or Marketing the Space [7] The Absence of Limitations on Type of Use or Type of Subtenant for the Space [8] The Ability to Preclude Artificial Limitations on the Extent and Duration of the Landlord's Recapture Rights [9] The Right to Recoup All Installation and Subleasing Related Costs Before the Landlord's Profit-Sharing Rights Kick In [10] The Ability to Reoccupy the Space and Collapse the Sublease in the Event of Economic Cycle Recovery Without Landlord Consents or Further Economic Sharing with the Landlord [11] The Ability to Maximize the Subleasing Target Market by Providing for an Increase in the Tenant's Security Under the Direct Lease to Offset or Alleviate Any Landlord Concerns About the Creditworthiness of the Tenant's Proposed Subtenant [12] The Ability of the Subtenant to Further Remarket and Sublet the Space -32.03 Lease Articles Addressing Assignment, Mortgaging and Subletting Rights [1] Introduction [2] Restrictions on the Tenant's Assignment, Mortgaging and Subletting Rights—An Onerous Provision [3] A Somewhat “Kinder and Gentler” Version of the Assignment, Mortgaging and Subletting Provision -32.04 Conclusion Appendices Glossary of Commercial Leasing Terms with Practice Pointers Index