Co-tenancy clauses: the retail-specific trap

A co-tenancy clause ties one tenant's rent to whether other tenants are still open around them. It's a common ask in retail leases, and it's also one of the few clauses where a single event entirely outside your control, like an anchor tenant closing, can trigger rent reductions across multiple leases at once.

How the trigger works

Most co-tenancy clauses key off an occupancy percentage for the property as a whole. When overall occupancy drops below a set threshold, typically somewhere in the 75% to 85% range, the clause activates. A single large anchor leaving can push a property below that line fast, since anchors often account for a disproportionate share of a shopping center's total leased square footage.

What it costs when it fires

The remedies are usually spelled out in the lease, and they're not minor. One common structure cuts rent by half, for example from $20 to $10 per square foot, and adds a right to terminate entirely if the landlord hasn't secured a replacement anchor within about a year. Some landlords negotiate a softer version, converting rent to a percentage of the tenant's sales instead of a flat cut, but the direction is the same: less income to the landlord, for as long as the occupancy gap persists.

Why it's specifically a retail trap

The part that catches landlords off guard is the cascade. Losing one anchor can trigger co-tenancy relief across several other leases simultaneously, since each affected tenant's clause reads off the same property-wide occupancy number. A landlord managing a handful of retail properties without a dedicated leasing team can be especially exposed here, since the full financial hit from one vacancy doesn't show up anywhere until every co-tenancy clause in the property gets checked against it.

None of this is legal advice, and whether a specific property's occupancy has crossed a co-tenancy threshold depends on real lease math, not a general rule. RenewSavvy surfaces every co-tenancy clause across a portfolio along with its trigger threshold, so a vacancy's full exposure is visible immediately instead of discovered lease by lease.