What is an "exclusivity clause" in a lease?

An exclusivity clause is a provision in a lease that prevents the landlord from leasing space to similar businesses within a specified area. This clause is particularly important for tenants, especially in retail or commercial settings, as it helps to protect their market share and customer base by ensuring there are no competing businesses in close proximity. For example, a coffee shop may insist on an exclusivity clause to prevent the landlord from leasing another space in the same shopping center to a different coffee shop. This clause can be a critical factor for tenants when negotiating lease terms, as it can significantly impact their ability to attract customers and maintain profitability in a competitive environment.