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The tragic events of 11 September 2001 have caused people in all walks of life around the world to pause and reflect about what is important to them. With the World Trade Center, one of the icons of global capitalism and New York’s skyline, reduced to a heap of burned and twisted rubble at ‘Ground Zero’ in lower Manhattan, the world of commercial real estate is undergoing a time of reflection in the wake of these unbelievable events. While the catalyst for this time of reflective analysis was at the same time both horrific and compelling, the careful consideration of relevant lease issues and of the need for disaster recovery planning that has resulted will help everyone to be better prepared for unexpected events of any kind in the future. The purpose of this paper is to identify three standard lease provisions that have always been important, but now bear even closer scrutiny in the aftermath of the catastrophic losses of 11 September. These provisions are: Casualty; Interruption or Unavailability of Services; and Insurance. Most form leases contain provisions that address these subjects and raise various issues that are ripe for re‐examination. This paper discusses how such issues might be analysed (or re‐analysed) in the aftermath of this senseless tragedy. Please note that the legal conclusions, practices and norms outlined in this paper are generalised from a United States perspective and, as such, the norms and potential solutions may vary in other countries and on a case‐by‐case basis within a country. Further, the starting point and, often, the ending point in the analysis of any leasing issue is the specific language of the lease, which itself is subject to any applicable laws of the relevant legal jurisdiction. It is important to consider the issues and analysis discussed in this paper in light of the specific market norms and laws of the jurisdiction which are applicable.

The 11th September terrorist attacks on America continue to affect the corporate real estate industry, and this paper is intended to address a number of those ongoing effects. It first discusses property insurance coverage in general and then proceeds to analyse whether damage from acts of terrorism is covered under pre‐11th September and post‐11th September property insurance polices. It also addresses the current status of proposed US Government intervention as a terrorism insurance backstop. It then describes the strategies which certain clients located within the areas directly affected by the terrorist attacks implemented in order to be able to gain immediate access to alternative space. Finally it examines selected lease clauses to which landlords and tenants should pay closer attention in light of the terrorist attacks, including operating expense provisions, force majeure provisions, waiver of subrogation provisions, use prohibitions and alteration provisions.

The relationship between the owner and an occupier of a commercial property is determined by the lease, inasmuch as it sets out the legally enforceable duties and obligations of each party. However, it is only that, a legal framework; it is not a practical management handbook on how best to operate the premises and generate an amicable business relationship. The purpose of this paper is to consider the role of the lease in reinforcing and disrupting the generation of best practice within real estate management.

The paper examines actual leases to understand the service charge and how data pertinent to it is collected, disseminated and interpreted by both parties in carrying out their activities within and about the property. This is then benchmarked against provisions of the Service Charge Code of Practice.

Despite a number of incarnations of a code of practice on service charges during the lifetime of the leases examined, the research finds a troublingly small uptake of its ideas within new leases.

The findings predict future problems in the practical management of multi-tenanted properties, coupled with a call that leases are written to the Code’s requirements.

No such lease examination has been undertaken to date.

The past 15 years have seen a substantial increase in the number of institutions established for the purpose of long‐term investment, and in the size of the aggregate funds available for that purpose. The new investing institutions are mainly pension funds and life offices, and their rise has been due to the introduction and growth of new occupational pension schemes. The same period has seen a marked change in investment policy on the part of almost all investing institutions, so as to give increasing prominence to investment in real property alongside the traditional areas of investment in government securities and in the equity markets. This policy change has been influenced by the concomitant growth of inflation, and the belief that real property offers the best protection against its damaging effects.

No matter the size or scope of a biotech laboratory project, neither landlords nor tenants should rely on traditional ‘form’ documents to address the many complex leasing issues unique to this industry. When negotiating and documenting a biotech lab lease, five clauses warrant particular attention. ‐ Construction of tenant improvements: Build‐outs of lab space can be highly specialised and elaborate. Tenants will require detailed involvement in design and construction of improvements while landlords may limit, to the extent possible, tenant improvements to those that are financeable, resuable and ‘generic’. ‐ Security deposits: Greater security in the form of a deposit and letter of credit may be required to balance the potentially higher risks and longer terms of many biotech laboratory leases. ‐ Hazardous materials: Most biotech laboratories will work with hazardous materials. Specially tailored lease provisions can help limit liability and mitigate the potential costs of removal, remediation and litigation. ‐ Building services and utilities: Biotech users may require high levels of heating, ventilation and air conditioning (HVAC), plumbing, electrical and janitorial services. Lease provisions for services and utilities should be tailored to the unique intended use of biotech premises. ‐ Assignment of sublease: Given the rapidly changing nature of the science, tenants may require added flexibility to sublease space or to assign the entire interest in the lease. Although these five clauses address only some of the many issues that landlords and tenants should consider in biotech lab leases, they have implications that echo throughout the lease.

This paper aims to report on research that investigates the use of green clauses in leases of office and retail premises in England and Wales.

The authors examined 26 recent leases of green build properties registered at HM Land Registry. The green clauses discovered were classified and compared with the model form green clauses promoted by the London-based Better Building Partnership's Green Lease Toolkit.

Of the 26 leases analysed, 18 contained some form of green provision.

As the sample selected was not representative, a larger study is needed to detect trends in green leasing. This research method does not show the impact of green clauses on property management.

This research illustrates the types of clauses that have been used in leases but also shows that green leasing principles are not yet the industry standard. Many new, long leases still make no reference to environmental practices.

This is the first research to be done examining the green content of agreed leases and develops a methodology that can be used for future research.

From time to time, clients ask counsel and brokers about the pros and cons of using an assignment versus a sublease to effect a transfer of possession and a transfer of obligations with respect to leased premises. With about equal frequency, questions come up regarding the differences between assignments and subleases, and ‘whether those differences really make a difference’ after all is said and done. While assignments and subleases are both means to achieve substantially similar ends, they do yield different legal and business results. The purpose of this paper is to explain and discuss some of the similarities and some of the distinctions between assignments and subleases, both from a legal perspective and from business and practical perspectives, and to discuss some of the reasons that the different parties involved in such transactions may prefer, or wish to select one of these transaction forms over the other.

This paper reviews the literature which models lease covenants using option‐pricing techniques, probabilistic measures of risk and the contractual misalignment of incentives. These quantitative models, in conjunction with conventional discounting mathematics, offer ways to gauge the effects on rent of changes to many lease clauses. With the exception of discounted cash flow analysis to adjust rents for leasing incentives, none appears to be used in practice yet. The program has been designed to bridge the gap between academic developments in this field and current practices in rental valuation. The program works from rental values set on benchmark or standard lease conditions in that market and adjusts for different clauses. The program displays all the stages in calculating the effects of each changed clause and operates entirely from parameters set by the user. Trials of this program are described.

The purpose of this paper is to critically review recent developments in the judicial approach to the preparation, service, and receipt of notices associated with the management of commercial property in England and Wales. It raises awareness of the range of problems that may be encountered in seemingly routine matters of language, and makes recommendations for practitioners in the form of a checklist of issues to be considered prior to issuing or responding to the various notices.

The paper employs critical analysis of settled case law and associated professional commentary.

The paper notes the speed with which the law continues to develop in these areas. In the light of this, it concludes that practitioners need to be far more aware of their obligations when serving or responding to the various forms of statutory or contractual notice than has hitherto been the case. The archaic language used in the drafting of leases is found to be a confounding issue, although it is demonstrated how this can be managed by paying close attention to critical detail.

The paper combines an examination of the relevant legal principles with a commentary on contemporary practices in the commercial property sector in order to make practical recommendations for professionals in an important area of real estate consultancy work.

Despite the growing diversity of lease structures in different global economies, the existing literature related to property service charge mechanisms has been largely confined to the UK property market. This study aims to examine tenants’ perceptions, experiences and satisfaction with being responsible for service charges in New Zealand, where major office submarkets are dominated by alternative forms of leases with different service charge responsibilities.

The study uses a structured survey of 107 major tenants of New Zealand’s listed property trust-owned properties located in Auckland (where net leases dominate) and Wellington (where gross leases dominate) complemented by ten in-depth interviews with senior property managers of tenant organisations. The collected data were analysed using various statistical tests and thematic analysis.

The results identify that tenants who are directly responsible for service charges are significantly more dissatisfied with their operating expenses (OPEX) responsibilities than tenants who do not have direct service charge responsibilities. They are dissatisfied with the interpreting, budgeting, calculating, accounting, allocating and auditing processes in the service charge management process. Tenants who are directly responsible for service charges are significantly more dissatisfied with the operation and maintenance procedures of their buildings and have weaker relationship strengths with landlords. Tenant perceptions of being responsible for service charges vary with their power relationship with the landlord, lease expectations and priorities, financial constraints, willingness to take part in the management of the premises and trust in the landlord.

This research highlights the importance of understanding the complexity of service charge mechanisms in countries where there are no regulations or codes of practice governing them and their impact on tenant leasing behaviours, experiences and satisfaction. Here, the importance of developing more widely applicable codes of practice representing countries with different lease environments is highlighted. The findings also emphasise the importance of understanding the dynamics of key market agents that actively create lease environments and how they interact and behave within these contexts.