What does co-tenancy in retail leases refer to?

Co-tenancy in retail leases primarily refers to the requirements placed on certain anchor tenants to remain in a shopping center or retail environment for the lease to remain in effect or for other tenants to receive specific benefits. Anchor tenants are typically large retail establishments that draw significant customer traffic to a shopping center, and their continued presence is often deemed essential for the overall success of the property.

The co-tenancy clause can stipulate that if an anchor tenant vacates the premises, smaller tenants may have the right to renegotiate their lease terms or can even terminate their lease if the required anchor tenant is no longer present. This arrangement is designed to protect the interests of smaller retailers who rely on the foot traffic generated by larger stores.

In contrast, other options do not accurately capture the essence of co-tenancy. Leases focused on a single tenant do not involve the dynamics of shared tenancy implied in co-tenancy arrangements. Rent sharing between tenants generally pertains to financial agreements and responsibilities rather than the structural occupancy aspects addressed by co-tenancy. Temporary occupancy agreements speak to short-term leasing situations that do not convey the long-term arrangements typically associated with retail leases and co-tenancy considerations.