[RPPTL LandTen] Accelaration Clauses - What's up with that?

Tue Feb 23 20:14:52 PST 2010

I second Scott's thoughts. Having dealt with a number of national credit
tenant leases recently and lost the battle for acceleration of rents,
much is dependent on the landlord's bargaining power.  However, even
when times were good, many big box and credit retail tenants would
refuse as "policy" the remedy of accelerated rents.  The alternative of
discounting to present value usually doesn't satisfy this type of
tenant, who, if they will accept it at all, will prefer to reduce
accelerated rent by the fair market value rent for the remaining term.
I don't consider this alternative much of a bonus to the landlord as it
essentially liquidates the tenant's risk.

 <http://www.shutts.com/shutts100.jpg> 	 Neil B. Shoter 
Partner / LEED Accredited Professional  
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	From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Frank, Scott
A.
	Sent: Tuesday, February 23, 2010 2:47 PM
	To: RPPTL Landlord Tenant Committee
	Subject: Re: [RPPTL LandTen] Accelaration Clauses - What's up
with that?

	Doing a large number of retail leases, this is something I have
had to deal with for national credit tenants for quite a while.  And the
truth of the matter is, with the big players, we almost always give in.

	But you are right in that a larger number of smaller, less
credit-worthy tenants are asking for it more these days.  I have given
in some times, and not others.  A few compromises I have used
(representing both landlords and tenants) is the reduction to present
value/offsetting against market value; inserting a liquidated damages
clause in its stead (anywhere from 3-12 months rent depending on what
the market could justify); and bumping up security deposits to offset
the losses.  I also am careful to advise landlords of their need to stay
on top of defaulting tenants and of how they will need to proceed in the
future in the event of a default - i.e., pay my litigation partners lots
of money to go after ongoing defaults.  But again you are right in that
landlords today just want filled space, and are often willing to risk
that the space may be empty again in 9 months without fully adequate
remedies against the tenant - but I tell them and let them decide.

	Scott A Frank
	Attorney at Law
	ARNSTEIN & LEHR LLP 
	www.arnstein.com <http://www.arnstein.com/> 

	515 North Flagler Drive 

	Sixth Floor 
	West Palm Beach, Florida 33401-4323
	Phone: 561.833.9800 
	Fax: 561.655.5551

	433 Plaza Real
	Suite 275
	Boca Raton, Florida 33401-4323 
	Phone: 561.962.4145
	Fax: 561.962.4245 
	SAFrank at arnstein.com <mailto:SAFrank at arnstein.com> 

	Offices in Illinois, Florida, and Wisconsin 

________________________________

	From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of George
Pincus
	Sent: Tuesday, February 23, 2010 2:38 PM
	To: RPPTL Landlord Tenant Committee
	Subject: [RPPTL LandTen] Accelaration Clauses - What's up with
that?

	Is it just me or is every tenant on the planet trying to
negotiate acceleration clauses out of leases?

	How are you responding to this in this tenant oriented market?  

	What are you saying to your landlord clients when they look at
you and say "I need to plug the whole in my building, I don't care what
the tenant is asking for - get this deal done ", knowing that someday
they will come back and say to you "how could you let me sign a lease
without an acceleration clause in the remedies section?"

	I am dealing with this every day, so I am interested in how
other people are responding to this issue. 

	Thanks.

	George A. Pincus, Esq.

	Shareholder

	Stearns Weaver Miller Weissler

	  Alhadeff & Sitterson, P.A.

	New River Center, Suite 2100

	200 East Las Olas Boulevard

	Ft. Lauderdale, FL 33301

	Telephone: 954-766-9705

	Facsimile:    954-766-9719

	E-mail: gpincus at stearnsweaver.com <mailto:gpincus at swmwas.com> 

	www.stearnsweaver.com

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