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Commercial Lease Due Diligence in Real Estate Acquisitions: Key Issues and Best Practices

Buildout Obligations, Termination Rights, Purchase Options, Co-Tenancy, Rental Terms

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Thursday, March 28, 2024

Recorded event now available

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This CLE course will prepare real estate counsel to evaluate lease provisions that may significantly affect commercial real estate purchasers. The panel will discuss the importance of tenant estoppels and provisions on tenant buildout, termination rights, expansion rights, purchase options, co-tenancy, "go dark," and other provisions.


Leases are the contractual basis for rental income and the value of a commercial property. Lease review should confirm that rental terms and expense allocations are consistent with the purchaser's economic underwriting of the property and the seller's rent roll and operating statements.

Counsel should also confirm that all leases and amendments are correctly executed and assignable to the purchaser and that the seller and tenant execute any required assignment documents. Tenant estoppels should be consistent with the leases and address other matters not adequately covered in the leases.

Practitioners must identify and interpret various lease provisions regarding the landlord's and tenant's obligations that may affect the continued viability of a lease and operation of the property. These include buildout and other responsibilities of the landlord that the purchaser will assume, purchase options or rights of first refusal, termination rights, "go dark" provisions, tenant expansion rights, co-tenancy provisions, and use and noncompete restrictions.

Counsel must also review any SNDA provisions in the leases and understand how lenders will view these provisions (or their omission).

Listen as our authoritative panel discusses best practices for lease due diligence regarding both property economics and legal concerns and provides a detailed analysis of these lease provisions. The panel will also discuss the points to address in the tenant estoppel and how the tenant estoppel can be used to confirm terms or facts that may be unclear in the lease itself.



  1. Lease review: economic terms
    1. Rental terms: percentage rent, rent abatement
    2. Allocation of taxes, insurance, maintenance, and other expenses between landlord and tenant
    3. Comparing tenant estoppels, leases, and rent roll; resolving inconsistencies
  2. Lease review and key legal provisions
    1. Tenant improvements, landlord obligations
    2. Use restrictions and noncompete provisions
    3. Renewal/expansion options
    4. Early termination clauses
    5. Purchase options and rights of first refusal
    6. Continued operation: "go dark" provisions
    7. Co-tenancy provisions
    8. Parking requirements
    9. Assignment and subletting
    10. Subordination, non-disturbance, and attornment


The panel will review these and other relevant issues:

  • What are best practices for confirming the income and expenses of the property?
  • What remaining tenant buildout and other obligations will the purchaser be taking on as successor landlord?
  • Do any tenants have termination, purchase option, "go dark," or similar rights impacting the lease or the property's operation?
  • Can the purchaser comply with all use restrictions, noncompete, co-tenancy, and parking requirements contained in the lease?


McPhelin, Hannah
Hannah Dowd McPhelin

Vice President, Real Estate and General Counsel
Harristown Enterprises

Ms. McPhelin is the Vice President of Real Estate and General Counsel for Harristown Enterprises Inc., a non-profit...  |  Read More

Steeb, Malinda
Malinda R. Steeb


Ms. Steeb is an associate in the Real Estate Practice Group, resident in the Pittsburgh office.

 |  Read More

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