Tenant Leasing Illustrated
December 2013
Issue #23



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Madison Park
Hello,

We all have different notions of aesthetics and marketing value and this can often lead to conflicts between owners and tenants in terms of signage. This applies with respect to office, retail, or even warehouse or industrial space.

In today's newsletter, we suggest seven signage necessities for you to cover in your lease.

Sincerely,
Alan
Alan Katz
Mintz & Gold LLP 

 

Green (Bearded) Monster and Your Signage

 

As a Mets fan, I do not love or hate the Boston Red Sox, although I admit I harbor some residual guilt over having been (along with 400,000 other people) at the Bill Buckner/Mookie Wilson sixth game of the 1986 World Series. Let's not even discuss the guilt that comes from their year with Bobby Valentine.

But you have to love this year's World Champion Red Sox. No, not because they won or the way they played. I love the beards.

As even most casual sports fans know by now, a bunch of the Sox players sprouted lumberjack beards and their games often looked as if a Capital One Visigoth commercial had broken out into a baseball game. Good plays were celebrated with beard tugs.

Yet, despite a family of raccoons living in some of the facial hair gone wild (see Mike Napoli), these Sox put the kibosh to Steinbrenneresque notions of appearance and used their ZZ Top looks to build team cohesiveness and overachieve their way to a World Series championship.

Although the hirsute challenged at Mintz & Gold often celebrate a well drafted lease clause with a little beard tug, what does this have to do with commercial leasing?

Well, in leasing, unlike apparently in baseball, appearance does matter.

Presentation through building signage is crucially important to tenants, on aesthetic and marketing levels, whether involving office or retail tenants, or even warehouse or industrial tenants.

Conflicts can arise since Landlords understandably want to control the appearance of their building's exterior, the presentation of their lobby and elevators and even the hallways on leased floors.

The initial drafts of most leases strictly restrict the exterior and interior signage rights of the tenants by requiring landlord consent. Tenants need to affirmatively address these restrictions in order to create the appearance that they wish to achieve.

The importance cannot be overstated in retail leasing since the look of the storefront can have a huge effect on foot traffic, although the signage of a building, lobby and premises entrance is also of utmost importance to more traditional office, storage and even industrial tenants.

Make sure to follow these seven razor sharp suggestions when addressing the signage in your lease:
  • Require pre-approval of any exterior or lobby signage. Most landlords want to control the exterior and lobby of their building and will not allow exterior or lobby signage or even agree to be "reasonable" (unless you are a large office tenant or major national chain retail tenant) since they do not want to end up in court over an aesthetic dispute. At a minimum, you should require pre-approval based on a lease exhibit of a prototype of your intended signage or an example of your signage at another location. The same approach should be applied for outdoor flags, monuments, awnings, canopies and the like.

    This issue is particularly important for large retail chains, in which event you should require the right to change your signage over the term of the lease in accordance with your national signage program.

    Whether office or retail, specifically allow for use of your logo, trade name or other unique signage elements.
  • Office tenants should require that the landlord be reasonable with respect to entrance signage. Pre-approval through a prototype or exhibit should be obtained for entrance or door signage, but you should also push to have your landlord be reasonable going forward. If you control the entire floor you should seek to remove all landlord approval rights.
  • Make sure your lease describes the signage to be provided by the landlord. This includes signs in lobbies, floor lobbies, elevators, driveways and all other common areas or exterior locations. If these are not made explicit under your lease, then you will have no control over how your landlord addresses these issues.
  • Negotiate your signage rights in terms of other tenants. If you have a competitor in the building, you do not want them to have superior signage and exposure, whether on the exterior of the building, on a pylon sign or in the lobby. This is difficult to control if the other tenant has a significantly larger presence in the building, but must be focused upon during lease negotiation.
  • Require that your lease address the details of directory listings. Landlords often try to limit the number of listings, which are important identification tools for office tenants. A law or accounting firm will want to know that every professional (or at least every partner) is listed. Also address potential subtenants or assignees or perhaps related entities or space sharers. If the landlord uses a computerized directory, do not accept any limitations.
  • Prepare for unique circumstances. For example, many NYC buildings are subject to Landmarks Preservation Commission restrictions. Do your due diligence beforehand so you are not blindsided by legal requirements and so that you can negotiate the right, at your cost but with the landlord's cooperation, to obtain necessary permits and approvals. We once represented an office tenant in a NYC building where the lobby itself had Landmarks status and ended up negotiating a right to obtain Landmarks approval and, in the interim, the right to install temporary free-standing stanchion signage.
  • Exclude signage within your premises. There should not be any restrictions on signage within your premises if it is not conspicuous to the outside world. Many leases are overbroad in restricting all signage even if not visible outside the premises.
Even though they looked like the regulars on Duck Dynasty (or perhaps Chewbacca), the Red Sox used their scruffiness to their advantage. In commercial leasing, however, appearance still counts for something, so properly address the signage requirements in your lease to avoid undue worry that could shave years off your life.

About Us

 

Mintz & Gold prides itself on providing the highest quality legal representation often associated with large law firms with the attention and reasonable costs of a smaller law firm.  Mintz & Gold's Real Estate Department has a national practice specializing in a broad range of commercial real estate law, with a particular focus on commercial leasing. We have extensive experience with respect to office, retail and shopping center leasing, and have represented major Manhattan landlords, national and multinational institutional tenants and national retail chains. Most of our attorneys practiced for many years at large institutional law firms before joining Mintz & Gold.

For more information regarding Mintz & Gold's real estate practice, click here.

For a list of representative transactions of Mintz & Gold's real estate group, click here.

For Mintz & Gold's website, click here.

Contact:
Alan Katz
katz@mintzandgold.com
Telephone: (212) 696-4848
Fax: (212) 696-1231



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This newsletter has been prepared for general information purposes only, and is provided with the understanding and subject to the user's agreement that it does not constitute the rendering of legal advice or other professional advice by Mintz & Gold LLP, and does not create any attorney-client or other special relationship. The content of this newsletter may be considered advertising under the ethical rules of certain jurisdictions and prior results do not guarantee a similar outcome. You should not rely upon this newsletter without seeking legal advice from an attorney licensed in the relevant jurisdiction(s). THE CONTENT OF THIS NEWSLETTER IS PROVIDED AS-IS WITH NO REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. Additionally, the information contained in this newsletter does not constitute tax advice. Any discussion of tax matters contained in this newsletter is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending to another party any transaction or matter.

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