While problems associated with giving or getting Right of First Refusal (ROFR) may vary depending on the subject matter of the right (adjacent space, post-lease expiration renewal, purchase of the underlying property, right to provide financing, etc.), the one problem all have in common is that there is always a mismatch between what the grantee (usually a tenant) would design for itself and what a third party concocts in the form of its own offer.
Let’s give an example based upon a ROFR to lease adjacent space. Assume that a 9,000 square foot tenant has three years to go in its lease term followed by a five year extension option. Conveniently, two adjoining spaces, each measuring 3,000 square feet, become available, one of which is incontestably adjacent to that tenant’s space. [Read more…]
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