5 Lease Clauses Every Southlake Tenant Should Negotiate

Quick answer: Five lease clauses move the economics of a Southlake commercial lease more than any other: tenant improvement allowance, free rent, renewal options, CAM caps, and exclusive-use clauses. Negotiating these well saves a typical Southlake tenant $50,000–$250,000 over a 5-year term.

1. Tenant Improvement (TI) Allowance

The TI allowance is the landlord's contribution toward building out your space. In Southlake:

• Retail: $30–$60 PSF for first-gen; $0–$30 PSF for second-gen
• Office (Class A): $20–$50 PSF on 5–7 year terms
• Medical office: $50–$120 PSF for ground-up buildout
• Restaurant: $80–$200 PSF for ground-up with hood / grease trap

What to negotiate beyond the dollar amount:

• Direct payment vs. reimbursement - direct is better; reimbursement ties up your cash
• Documentation requirements - keep them simple
• Unused TI - apply to rent? Forfeit? Negotiate apply-to-rent
• Landlord's contractor markup - common landlord trick; require open-book pricing

2. Free Rent / Rent Abatement

Standard concessions in today's Southlake market:

• 5-year retail term: 1–3 months free
• 5-year office term: 2–4 months free
• 7-year office term: 4–6 months free
• Medical buildout: 3–6 months free during construction

Negotiate timing - front-loaded is better for cash flow during buildout and ramp.

3. Renewal Options

A renewal option protects your right to stay in a successful location at a known cost. Without it, you are at the landlord's mercy at expiration.

What to negotiate:

• At least one 5-year renewal option (better: two)
• A pre-agreed rent formula - fair market value with a CPI cap, OR a fixed escalation
• Notice window of 6–9 months before expiration (not 12+, which forces you to commit too early)
• Right to relocate within the center if the landlord redevelops

4. CAM and Operating Expense Caps

For NNN retail leases (and gross-up provisions in modified gross office), CAM and operating expense increases can run away. Negotiate:

• Annual cap on controllable CAM: 3–5% per year, cumulative or non-cumulative
• Exclusions: capital expenditures, roof and structural, landlord legal fees, marketing fees
• Gross-up to 95% occupancy so your share is not inflated by vacant neighbors
• Audit rights - at least every 2 years, with the landlord paying if errors exceed 3%

5. Exclusive Use Clauses

For retail and restaurant tenants, an exclusive-use clause blocks the landlord from leasing space in the same center to a direct competitor. In a Southlake Town Square or strip-center context, this can be the most valuable clause in the entire lease.

What to negotiate:

• Specific definition of your use that captures real competition
• Radius - at least the entire shopping center; ideally a 1-mile radius for major concepts
• Remedy for breach - rent reduction, right to terminate, and damages
• Carve-outs the landlord requests - keep them narrow

Bonus: clauses to watch for

• Personal guaranty with no burn-off - push for burn-off at 24–36 months of on-time rent
• Landlord termination rights - typically should require 12+ months notice and substantial penalty
• Holdover rent - capped at 125–150% of last rent, not 200%
• Demising wall and yield-back - your buildout becomes the landlord's at lease end; negotiate yield-back standard upfront

How a tenant rep gets these clauses negotiated

These five clauses do not get negotiated by accident - landlords don't volunteer them. A Southlake tenant rep drafts them into the LOI before the landlord's attorney produces a 40-page lease. Once the lease is drafted, every concession becomes a fight.

Tenant rep is free in Southlake - the landlord pays the commission. Call (817) 559-1235.