Consider Repercussions of Name and Signage Privileges

A major or important tenant may insist on getting special name and signage privileges on your building. You should carefully consider such a request. It may have positive or negative effects. If the tenant is a prestigious company, naming the building after the tenant may make your building more inviting to prospective tenants; if the tenant has been embroiled in scandals or is suffering financially, having its name on your building may discourage prospective tenants. Keep in mind that if you give special name and signage privileges to a less-than-major tenant, you may be unintentionally shutting the door on a prospective major tenant that would have wanted the same privileges.

If you’re willing to agree to a special building name or a signage demand, you can avoid pitfalls by negotiating protections in the lease, including: 

• Setting strict signage requirements;
• Requiring the tenant to pay all signage-related costs; and
• Getting the right to cancel signage privileges.

To learn how to protect your interests when you’ve decided that such a lease right is a good move for your property, see “Negotiate Seven Safeguards When Giving Building Name Privileges,” available to subscribers here.

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