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If you are looking for space in a hot market or in a new shopping center, you might have heard the leasing agent say that. I tell people many times that I would love to have their use/concept, but I cannot and the reason is EXCLUSIVES. Many landlords give particular tenants exclusivity. An exclusivity clause is defined as:

“A lease clause that limits the number of stores that can open in a shopping center competing with the lessee.” (ICSC’s Dictionary of Shopping Center Terms)

Fighting to get an exclusive is worth the trouble (if the landlord gives you any). If you will notice, you never see a Starbucks in the same shopping center as Caribou Coffee. The main reason is to allow each business to flourish and to prevent one business from putting out the other business. I have heard numerous stories of the disasters when two businesses that are near identical are in the same center. The results have never been good. Having a Ben & Jerry’s Ice Cream close to a Smoothie King is not a form of direct competition and should not violate any exclusivity clause. However, if a landlord opened a immediately next to Circuit City, you have a problem – huge violation of the exclusive.

So, I think you get the point. You need to be around retailers that pull you up and help increase sales, not retailers that are competing for sales. There are exceptions to this rule and some landlords just do not give exclusives, but that has more to do with flexibility and keeping options open as changes occur in the retail cycle and life of the shopping center.

Key: Ask your broker and attorney to negotiate exclusive language into the letter of intent and lease. It might not be possible and its not always worth sacrificing a great site for an exclusive, but you must try to get it.

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