Some commercial Landlords may offer a right of first refusal to an anchor Tenant. A right of first refusal is essentially an option to match a bona fide offer to purchase the property. Many Landlords will not agree to such a right because it acts as an encumbrance on title and could kill an otherwise viable deal.
A Right of First Offer differs from a Right of First Refusal. A Right of First Offer is a contractual obligation that allows the Tenant to bid on the property before the Landlord markets the property to the public at large.
While many Landlords do not generally include Rights of Refusal or First Offer in their standard form of lease, such a right may be appropriate for an anchor Tenant or an investor in the property.
*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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