most-favored-tenant clause

most-favored-tenant clause

A clause in a lease promising an existing tenant the same concessions as may be granted to future tenants, for a specified period of time. Frequently encountered when a new building wishes to secure a large tenant, but that tenant wants to wait and see if the concession package gets any better with the passage of time. As a compromise, the landlord will agree that future tenants will never receive a better deal than the existing one.As a practical matter, the first large tenant in a building will almost always receive the best deal, so the clause is in the nature of a “feel-good clause.”

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.