Advanced Leasing Strategies: Transfers To Affiliates ("Permitted Transfers") – A Simple Solution

It's time to peel back the layers and reveal the core of the proverbial "Permitted Transfer" clause. Oftentimes this clause is so over-lawyered that neither party can decipher what it means in practical terms. Knowing the "pain points" of the parties leads to a simple solution. Here's how:

• Landlord's View: As a basic principle, a landlord must have the ability to choose who occupies their building. A landlord desires to have a tenant that is compatible with other occupants in the building and is credit-worthy – having a balance sheet sufficient to meet the lease obligations. If you press against any of these "pain points", you will meet strong resistance.
• Tenant's View: In contrast, sophisticated tenants these days need to have the flexibility to bring on investors, to reorganize the company, to assign or sublease to affiliates, to "go public" (IPO), and to sell their assets or stock, free of any landlord approval rights. In fact, it's insulting to a tenant to