Restaurant Lease Agreement
(Modified Gross Lease, Strip Center) (Pro-Landlord) (TX)

Summary

This restaurant lease agreement provides for the lease of restaurant space in a strip center in Texas. This template is a modified gross lease and favors the landlord but includes negotiating tips for the tenant. This template includes practical guidance, drafting notes, and alternate and optional clauses. In a modified gross lease, the tenant is responsible for the payment of base rent, and the tenant and the landlord share property-related expenses. The division of expenses in a modified gross lease can vary from deal to deal and is subject to negotiation by the parties. Generally, though, the tenant pays for increases in operating costs, real estate taxes, and insurance above either a base year, which is usually the first calendar year of the lease, or a stipulated amount (i.e., an expense stop). In this template, the tenant pays all expenses related directly to the leased premises, including maintenance and repairs, utilities, servicing of its cooking equipment, grease trap systems, ansul and fire extinguishing systems, and exterminating costs. The landlord pays for all operating expenses of the strip center, including real estate taxes and insurance, with the tenant contributing its pro rata share of increased costs over the base year. Modify this template to meet the specific terms of your transaction. For further guidance on restaurant leasing, see Restaurant Leasing Resource Kit. For other restaurant and retail lease templates to use in Texas, see Restaurant Lease Agreement (Long Form, Net Lease, Shopping Center) (Pro-Landlord) (TX), Residential Lease Agreements (TX), and Retail Lease Agreement (Short Form) (Pro-Landlord) (TX).