Co-tenancy

Co-tenancy is a contractual agreement between two or more tenants sharing a commercial space, typically in a shopping center or office building. In this arrangement, each tenant has their own separate lease agreement with the landlord, but they also agree to certain shared responsibilities and benefits. This can include sharing common areas, maintenance costs, and promotional efforts to drive foot traffic to the overall property. Co-tenancy agreements can help tenants reduce costs, increase visibility, and create a more cohesive and attractive environment for customers.

Co-tenancy is a key concept that affects property valuation, financing decisions, and investment returns in the triple net lease market. Understanding Co-tenancy helps investors make informed acquisition and management decisions.

Co-tenancy directly influences how commercial properties are valued, financed, and traded. Changes in Co-tenancy can impact cap rates, NOI calculations, and overall investment performance for net lease properties.

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