What an anchor leaving does to everyone else's rent
Co-tenancy clauses let smaller retail tenants cut rent or walk when an anchor goes dark. DealWise reads those clauses and models the knock-on — who is triggered, what it costs, how far income falls.
One departure, priced across the whole centre
An anchor going dark is not one vacancy. It is one vacancy plus every clause elsewhere in the rent roll that the vacancy switches on, and the second part is usually larger than the first.
- Who is actually triggeredNot every lease carries a clause, and the ones that do trigger on different thresholds. The test names the tenants entitled to act rather than assuming all of them are.
- What each remedy costsSome clauses drop rent to a percentage of sales, some grant a reduction, some allow termination outright. Each is modelled as the figure it produces.
- The total, before the anchor's own rentThe knock-on is reported separately from the anchor's vacancy, because conflating them hides which half of the problem is which.
Co-tenancy stress test
If Cardinal Freight (48.1% of GLA) goes dark
- Halstead Components−$91,008/yr
Rent reduced to 4% of gross sales
- Meridian Cold StorageNo change
No co-tenancy clause
- Suite 300 (vacant)−$67,500/yr
Lease-up assumption suspended
Modelled income falls $158,508 a year, 12.4% of base rent, before the anchor's own rent is counted.
Retail only, and that is the point
Office and industrial leases do not generally carry co-tenancy provisions. This is one of a handful of places where multi-tenant retail genuinely underwrites differently from everything else, rather than being the same model with different numbers in it.
The clauses also vary enormously. What counts as the anchor, what counts as going dark, how long the tenant has to act, and whether the remedy is reduced rent, a switch to percentage rent or an outright right to terminate — all of it is negotiated per lease.
Which is why this cannot be a rule of thumb. It has to be read out of each lease individually, and it is the kind of provision that gets summarised into a rent roll as a blank column and then forgotten until it fires.
Questions people ask
What is a co-tenancy clause?
A provision in a retail lease letting a smaller tenant reduce rent, or leave, if an anchor closes or overall occupancy drops below a stated threshold. It is how a single anchor departure becomes a problem across the whole centre rather than one vacant box.
What does the stress test actually do?
Takes the co-tenancy language read out of your leases, applies the trigger you are worried about — usually a named anchor going dark — and models the knock-on: which tenants are entitled to act, what each one costs if they do, and what the income looks like afterwards.
Does this apply to office or industrial?
No. Co-tenancy is a retail mechanism and office and industrial leases do not generally carry it. This is one of the places where a multi-tenant retail centre genuinely underwrites differently from anything else.
Where does the clause language come from?
The leases themselves, read during abstraction like every other term, and shown against the clause it came from. Co-tenancy provisions vary enormously in what they trigger on and what remedy they grant, so reading them individually is the only way to model them.
Is a co-tenancy clause always bad for a landlord?
It is a risk to income and it is also what got the smaller tenants to sign. The useful question is not whether the clauses exist but how much rent is exposed to them and what a trigger would actually cost, which is a number rather than a worry.
Where this goes next
Tenant credit & guaranty
The other way income exposure hides in a rent roll.
Rollover & re-leasing
What happens when the anchor's lease simply ends.
Percentage rent calculator
The remedy many co-tenancy clauses drop tenants onto. Free tool.
Lease abstraction
Where the clause language is read from.
All capabilities
Everything else the product does.
What is a rent roll?
The table the exposure is measured across.
Price the anchor risk before you buy the centre.
Upload the leases and DealWise reads the co-tenancy language out of each one, then models what a dark anchor would actually trigger across the rest of the rent roll. Free plan, no credit card.