Case results
/
Real Estate
Outcome
$4.2M
Commercial lease dispute resolved for a retail landlord
Every dollar of arrears, interest and costs recovered from a national retailer, plus an early surrender of a Fifth Avenue flagship.
Practice
Real Estate
Year
2024
Court
NY Supreme Court, Commercial Division
Duration
14 months
Lead attorney
Daniel Mercer
01 · The challenge
A tenant using the lease against its landlord
In early 2023 a national apparel retailer stopped paying full rent on a 40,000 sq ft flagship on lower Fifth Avenue. It relied on a co-tenancy clause, arguing that the departure of a neighbouring anchor store let it pay a reduced ‘alternative rent’ and, later, walk away from the lease altogether.
By the time our client instructed us, arrears were growing by $310,000 a month and the tenant had already filed for a declaratory judgment. Re-letting a flagship of that size takes a year or more, so losing the case would have meant a long, expensive vacancy.
Monthly shortfall
$310K
Premises
40,000 sq ft
Tenant’s claim
Reduced rent, then termination
02 · Our approach
Four moves over fourteen months
We treated the lease as the case. Everything else, from interim rent to settlement, followed from what the clause actually said.
01
Weeks 1–3
Read the lease, not the summary
We rebuilt the drafting history of the co-tenancy clause from the 2016 negotiation files. The ‘anchor’ definition only covered stores above 25,000 sq ft.
02
Month 2
Keep the rent coming in
We moved for use-and-occupancy payments pending trial, so our client was paid at the contract rate while the case ran.
03
Months 3–9
Test the tenant’s numbers
Footfall and sales data obtained in discovery showed the store’s trade had grown after the neighbour left, undercutting its claimed loss.
04
Months 10–14
Move for judgment
We moved for summary judgment on the clause’s plain meaning, then opened settlement talks from a position of strength.
03 · The outcome
Paid in full, and the keys back early
The court granted partial summary judgment on the meaning of the co-tenancy clause. Two weeks later the tenant settled: every dollar of arrears, interest and legal costs, paid within 30 days, plus an agreed surrender nine months early so our client could re-let at market rent.
$4.2M
Arrears, interest and costs recovered
100%
Of contract rent paid during the case
9
Months of lease surrendered early
14
Months from instruction to settlement
In their words
“They told us what the lease actually said, not what we hoped it said. Then they won on it, and the tenant paid every dollar.”
Managing Director
Retail landlord, New York · name withheld at client’s request
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Prior results do not guarantee a similar outcome. Each matter turns on its own facts and law, and details are shared with client consent.
Daniel Mercer
Senior Partner
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