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  • Kevin Cleveland

What is a Retail Center?

During my career as a commercial real estate attorney, I have been amazed at the changes that have happened in the shopping center industry.  Who would have thought that a church, massage parlor, gym, church, vape shop, used clothing store and dentist could be the prime tenants in a shopping center?  A review of the many shopping center forms in my file, though, caused me to reconsider the nature of a shopping center and the typical requirement that it be occupied by “retail” tenants.

With Amazon circling its drones, landlords are searching high and low for shopping center tenants that will survive in the post-Amazon world.  At the same time, such landlords may find their hands tied by old documentation that requires retail tenants and hopes for synergism to spark successful sales for all tenants.

If you look at the typical declaration or reciprocal easement agreement for a shopping center or mall, the document normally includes a restriction on uses and a general statement that the project is to be focused on retail sales.  Unfortunately, retailers are tough to find these days, especially if you are trying to backfill a Toys R Us or Sears store.  Even more challenging is dealing with such projects in an environment where cities want mixed-use projects, where people can live, work and shop in one place.  The old documents for the old projects never anticipated the new world transition.

To combat the changing times, attorneys now need to take advantage of any opportunity to modify the old documents to allow for such transitions, and to review new leases and joint owner documents that still promote the pure retail concept.  Remember, you may want to put a gym in the old Sears’ location or add Goodwill as an anchor.

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