Part 13*: What is an “Exclusive” clause in a Commercial Lease?

Some commercial tenants will negotiate for an exclusive use where there are other tenants in the same building. For example, custom furniture store may ask for an exclusive such that the Landlord cannot enter into another lease agreement with a custom furniture store within a quarter mile radius. A craft beer shop may request a limitation on the number of beers other vendors can offer within a certain radius. The exclusive is designed to protect the Tenant from a situation where their products or services are being diluted by other similar uses in the immediate area.

The details concerning the exclusives are often negotiated. For example, the precise definition of the protected use, and the geographic area of the restriction can be clearly defined in the lease. In New York City, the geographic area may be measured in blocks whereas in the suburbs the geographic area maybe measured in miles.

*Thank you for taking the time to read this article. This article is part of our “Commercial Leasing for Non-Lawyers,” a Blog Series on Commercial Leasing. Other aspects of commercial leasing transactions in New York are discussed in other Parts of this series.

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