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Use Clause

A use clause is the lease provision defining the specific business purpose(s) for which the tenant may operate the property, which affects re-leasing flexibility if the tenant vacates.

Use clauses can be broad or narrow. A narrow clause limits the tenant to a specific operation, which may protect the landlord from unwanted uses but makes re-leasing harder if the tenant leaves. Exclusive-use provisions can also restrict what other tenants in a center may do. For buyers, a building designed for one use, such as a drive-through restaurant, should be considered for its alternative uses. Check the clause alongside zoning.

Related Terms

Lease Structures

Escalation Clause

Lease language setting scheduled rent increases — fixed bumps, percentage increases, or CPI adjustments.

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Lease Structures

Option to Renew

A tenant’s right to extend the lease for additional periods, usually at pre-set rent increases.

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Lease Structures

Gross Lease

The landlord pays property expenses and the tenant pays a single all-in rent.

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