The Retailvisory Glossary
All the U.S. retail leasing and mall terms you need to know.
Any costs for a tenant in addition to the “minimum rent” outlined in your lease, such as operating expenses, taxes, and utilities.
A larger tenant — think department store — that occupies the biggest portions of a shopping center’s real estate space. They are often located on the ends of the mall.
In lease structures that are based on “percentage rent,” this is the point where you start paying the percentage beyond the agreed minimum rent. Breakpoints can be natural (minimum rent divided by percentage rent) or artificial (determined during negotiations). If your breakpoint is never met, you’re only obligated to pay the minimum rent.
Cart/retail merchandising units (RMU)
Retail carts or retail merchandising units (RMU) are small-scale and short-term specialty leasing units often found in common areas that are ideal for brands looking to expand with limited time and financial investment. They provide a portable and more affordable retail option than traditional storefront leasing, allowing you to set up shop in a few easy steps!
Commencement date/lease commencement date
The date on which a lease becomes effective, and a tenant begins paying rent. Note that this is not the date of when your store officially opens.
Common area maintenance (CAM)
The physical work done to maintain the common areas of the property. Costs are typically charged back to tenants and outlined in a lease.
These are your fellow retailers. It’s important to know about your co-tenants because while some may be competitors, their success can boost your business as well, and their struggles could hurt your own foot traffic. There may be co-tenancy clauses in your lease that could alter terms based on the performance of your co-tenants.
This is when you end up paying rent without your store being open. Business owners get stuck with dark rent if they sign a lease but aren’t ready to open by the commencement date, having to pay while still doing construction or planning. We don’t want this! Make sure to follow our Retailvisory tips so that this doesn’t happen to you.
The condition that the retail space must be in when the landlord delivers it to you. Some examples of a delivery condition include As-Is: space is delivered in its current condition; Vanilla Shell: close to finished space with white walls; Gray Shell: spaces without electrical, HVAC, restrooms, elevators, etc. — it’s essentially a blank canvas; Turnkey: all remodeling is complete and ready to move in.
Delivery or possession date
The date on which the landlord must have the space ready for you to start construction.
Using a DBA is a way to conduct business without using your personal name or your business’s formal legal name. You will be asked for your DBA during the lease process, as it is the name that will appear on any storefront signage and directories.
The total rent paid by a tenant to a landlord, which includes “minimum rent” plus any “additional rent” and/or “percentage rent” if they apply in your lease.
A lease term for an organization created by an individual or individuals to conduct business.
Increases in rent above the base year. This could be a fixed amount each year, a percentage increase each year, or an increase based on increases in the landlord’s expenses (like real estate taxes).
A provision prohibiting your landlord from renting space in the building to a competing business.
When you think traditional mall shops you’re probably thinking of an in-line store. They are the stores that flank all the corridors of a mall.
Kiosks are a versatile, 360-degree store footprint often in the common areas of a mall. They are similar to a cart/RMU, but with a larger footprint and more opportunities to customize based on your needs and branding.
This is agreed upon work that your landlord will do to the space such as construction, installation, and renovation, usually before you move in.
Lease outline drawing (LOD)
A scale drawing detailing the exact dimensions of the store or common area unit.
Lease proposal/letter of intent (LOI)
A non-binding document summarizing the lease terms for a retail property prior to finalizing a formal lease agreement. It informs each party of some of the major terms and conditions that will be in the lease.
Merchandising, or visual merchandising, is all about how you set your products up to be sold, or the practice of organizing and displaying them in a way to encourage sales.
Minimum rent/base minimum rent/fixed minimum rent
The minimum initial rent due each month, often expressed in a per square foot, monthly, and/or annual amount. Note that there could be “additional rent” tacked onto this to account for operating expenses, taxes, and utilities.
Open date/store opening date
The date a store is open to customers. Note that this is usually not the same date as the “commencement date.”
Additional rent paid beyond your minimum rent, in certain lease structures, based on the established breakpoint and your annual or monthly sales.
A retail pop-up, also called a pop-up shop, pop-up store, or temporary retailing, is a temporary retail space rented or leased by a business that sells some type of retail good or service. Pop-up shop opportunities are different at each property but can help brands expand into new selling formats, reach new audiences, and test different markets in a low-risk way.
The land and buildings where a company conducts business.
A clause in the lease agreement that prevents a tenant from opening a similar operation within a certain radius of the leased premises.
A clause in the lease agreement that gives the landlord the ability to move a tenant to another location in the property.
The date the tenant is required to start payments to the landlord for use of the space.
A payment you make before the lease begins that is held by the landlord as “security” against future unknowns that may occur during the lease term.
Tenant improvement/construction allowance/tenant allowance
A pre-negotiated sum of money that a landlord will provide the tenant to cover a portion of construction or renovation costs.
The agreed length of time you are expected to stay in the space you’re leasing.
A provision allowing the landlord to terminate your lease if a certain condition is met or not. For example, if a restaurant is unable to secure a liquor license.
A clause in the lease agreement that outlines the exact type of merchandise to be sold in the space. It could also restrict certain categories of merchandise a tenant is able to sell in their store.