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Form 9-2: Supermarket Tenant Build-to-Suit Lease Letter of Intent

Form 9-2: Supermarket Tenant Build-to-Suit Lease Letter of Intent


Form 9-2: Supermarket Tenant Build-to-Suit Lease Letter of Intent; Tenant Builds Tenant’s Building; Landlord Constructs On- and Off-Site Improvements and Purchases Building after Tenant’s Completion


(21 pages)

  • Form addresses:

    • Tenant.
    • Lease term (and options).
    • The tenant's parcel and leased premises.
    • Area of major tenant's parcel and adjustments thereto.
    • Parcelization (recommended but optional).
    • Landlord's construction of on- and off-site work.
    • Specific items included within "Site Work or "Site Costs".
    • Tenant's construction of Building.
    • Specific items included within the cost of the building (building design/construction, building studies, permits, financing expense and any other direct costs for the building. Note: in this form governmental impact fees or assessments are not included in the Building Cost but are included in Site Costs.)
    • Specific items not included within the "Building Cost" (shopping center grading plan, center processing fees such as for site plan review and on- and off-site costs).
    • Landlord's purchase of completed building.
    • Annual rent (after Building Transfer Date) as the sum of Building Cost Rent, Site Costs Rent and Land Rent.
    • Increase (or decrease) in Building Rent based upon unexpected increase (or decrease) in Building Cost.
    • Increase (or decrease) in Site Costs Rent based upon unexpected increase (or decrease) in Site Costs.
    • Mutual lease cancellation right if Site Costs exceed an Agreed Maximum.
    • Increases to annual rent based upon Increases in Consumer Price Index.
    • Percentage Rent.
    • Rent Commencement: various landlord or tenant oriented alternatives.
    • Preliminary Rent: Pre Building Transfer Rent, Rent if Landlord Fails to Purchase Building from Tenant, Post Building Transfer Rent.
    • Building repair and maintenance.
    • Real estate taxes and assessments.
    • Common area maintenance.
    • Insurance.
    • Utilities.
    • Signs.
    • Assignment and subletting.
    • Developer oriented: Obligation of tenant to open fully stocked with short-term operating covenant.
    • Developer oriented "go dark" termination/re-purchase right.
    • Major tenant oriented co-tenancy clause.
    • Major tenant oriented optional "Concurrent Shops Construction" clause
    • Example: Food and Drug Restrictions.
    • Major tenant oriented "Use Restrictions".
    • Commissions.
    • Conditions which must be approved by tenant's real estate committee (final site plan, access, investigations and documentation).
    • Financing contingency (developer oriented).
    • Non-binding letter.
    • Landlord oriented optional "Landlord Limited Exclusive Right": For a fixed period following execution of this letter tenant promises to (i) make a good faith effort to obtain real estate committee approval for the proposed transaction and (ii) not negotiate with other land owners within an agreed radius of the site.
    • Exhibit: Sample "Building Specifications" used to describe the construction items to be included in the cost of tenant's building.
    • Exhibit to provide for major shopping center pylon or monument signs.
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