Why is Category Exclusivity Important?

//Why is Category Exclusivity Important?

As a tenant, you must understand what it means to be exclusive in your industry within the surrounding area. A landlord owes you this exclusivity, and your rights are a necessity.

Read on to learn more about this fascinating, vital subject.

Why is Category Exclusivity Important?

What is Category Exclusivity?

Ultimately, it is the promise that a landlord will not rent out properties near your business to other businesses that sell similar goods or services.

Let’s imagine a scenario. If you are looking for a place to rent for your grocery store, you’re probably looking for a large shopping center. Finally, you find a place to rent, and you are the only grocery store in that particular center. However, several months later, another grocery company purchases the space directly next to you. You would then become direct competitors, making it difficult for you to maintain your profit margin.

Category exclusivity allows for your business to make the most of its real estate without having to compete with businesses in the same property area. With the best intentions in mind, the idea is that the tenant will make enough money to continue paying rent, which benefits the landlord. It’s a circular benefit that helps everyone involved.

What is a Restrictive Use Clause?

This is very similar to category exclusivity. It is the concept that the tenant is asking the landlord to not rent spaces to businesses that are in direct contrast with yours. While you don’t want another ice cream store next to yours, you’re certainly not going to be pleased with a nightclub setting up shop as your neighbor.

You can ask the landlord about a restrictive use clause, which will protect your business from others that could affect your sales.

Why Are These Important?

Without category exclusivity or restrictive use, your business could be put at risk. Your profits won’t increase if your competitor is too close, and they’ll see a significant blockage if a contrasting business is next door. These concepts protect both you and your landlord. After all, if your business is conducted in a positive environment, then you won’t have a problem paying your rent.

Are you still confused about the concept of category exclusivity? Not to worry! If you’re looking for spaces for lease in Maryland, search no further than Tomarchio Enterprises.

We’ll work with you to find the best spaces in the state. We can also use our expertise to explain the ins and outs of the most important aspects of commercial leasing. For more information, you can call us today. Or, you can visit our website, and learn more about how commercial leasing works. We look forward to hearing from you!

By | 2018-07-05T14:46:47+00:00 July 5th, 2018|Commercial Real Estate|Comments Off on Why is Category Exclusivity Important?