Retail Merchandiser - May/June 2017 - 63

RETAIL MANAGEMENT
health system tenant to work effectively, certain retail leasing standards must
be relaxed. Although landlords often
impose mandatory business hours and
continuous operations requirements
on their shopping center tenants,
healthcare providers usually argue that
their hours of operation must follow
the work schedule of their on-site
doctors. In return, retail landlords will
often deny co-tenancy rights (which
allow for rental reduction based on the
vacancy of other space in the shopping center) to medical use tenants, as
medical tenants are perceived as being
economically independent of the other
businesses in the shopping center. For
this same reason, healthcare tenants
generally object to paying for membership in merchants associations with the
landlord's other tenants.
Access to the medical premises is a
critical deal point which often results in

intense negotiation. Depending on the
nature of its medical use, the tenant may
push the landlord to make exceptions to
permitted loading zone hours to accommodate ambulances and handicapped
patients. Similarly, the number and location of tenant's reserved parking spaces
is a common source of contention. If the
tenant's medical use requires redundant
energy supply (e.g., urgent care with operating rooms), the lease should specify
the location and capacity of the tenant's
dedicated generator, with a clear breakdown of the parties' related economic as
well as maintenance responsibilities.
Medical tenants frequently have
cooperative use agreements with other
healthcare systems. By extension, these
tenants negotiate for their cooperating
specialists to practice within the premises without obtaining landlord's consent.
Additionally, healthcare tenants will
fight radius restrictions (which limit the

tenant's ability to open other locations
within a specified area) and landlords'
attempts to impose percentage rent
(which is complicated by the nuances
of insurance coverage and Medicaid).
Retail landlords will often insist that
healthcare tenants coordinate and pay
for their own trash collection, including
'red bag' waste and other hazardous
medical materials. The outcome of lease
negotiations on these issues will vary
depending upon the context of each
particular transaction. O
Andrew Maguire is a
real estate partner at
McCausland Keen +
Buckman. He negotiates
leases for a variety of retail
landlords and health system
tenants across the country. Contact him at
amaguire@mkbattorneys.com.

May/June 2017

RETAIL-MERCHANDISER.COM

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Table of Contents for the Digital Edition of Retail Merchandiser - May/June 2017

Contents
Retail Merchandiser - May/June 2017 - Intro
Retail Merchandiser - May/June 2017 - Cover1
Retail Merchandiser - May/June 2017 - Cover2
Retail Merchandiser - May/June 2017 - 1
Retail Merchandiser - May/June 2017 - Contents
Retail Merchandiser - May/June 2017 - 3
Retail Merchandiser - May/June 2017 - 4
Retail Merchandiser - May/June 2017 - 5
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Retail Merchandiser - May/June 2017 - 7
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Retail Merchandiser - May/June 2017 - MCover1
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Retail Merchandiser - May/June 2017 - M1
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