Definition
A retail lease provision letting tenants break the lease or pay reduced rent if an anchor store closes or occupancy drops below a threshold. It's the commercial tenant's escape hatch from a dying mall.
Example Usage
When Macy's closed, the co-tenancy clause allowed smaller retailers to reduce their rent by 50% until a replacement anchor was found.
Origin
Emerged in shopping center leases during the 1980s-90s as tenant bargaining power increased
Fun Fact
Co-tenancy clauses became litigation goldmines during the retail apocalypse when anchor stores closed en masse.
Source: Commercial leasing and retail property terminology
Related Terms
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