Kick-Out Clause (Co-Tenancy / Sales)
A kick-out clause is a tenant-favorable lease provision allowing the tenant to terminate the lease early (or substantially reduce rent) if specified conditions are not met — most commonly minimum sales thresholds or anchor co-tenancy requirements.
Kick-out clauses give tenants — particularly in retail centers — a path out of a struggling deal. The two most common varieties: a sales-based kick-out (tenant can terminate if gross sales fall below a stated threshold after a measurement period) and a co-tenancy kick-out (tenant can terminate if a named anchor goes dark or the center occupancy falls below a stated percentage). They are critical risk-mitigation tools for retail tenants but also create meaningful landlord risk that must be priced into the deal.
Sales-Based Kick-Out Structure
Typical: tenant can terminate after Year 3 if gross sales for the trailing 12 months fall below a stated threshold (often the breakpoint used for percentage rent, sometimes a higher level). Termination requires advance notice (90–180 days) and often a termination fee (often equal to unamortized TI and brokerage commission). The threshold is the negotiation: tenants want a high threshold (easy to trigger); landlords want a low threshold (hard to trigger).
Co-Tenancy Kick-Out Structure
Tenant can terminate if a named anchor tenant ceases operations or vacates, or if center occupancy falls below a stated percentage (typically 60–75%). Most commonly used by national retail tenants in grocery-anchored or mall settings where co-tenant traffic drives the business case. Tenants may have a graduated remedy: percentage rent reduction first, then full kick-out if the condition persists.
Landlord Risk Management
Kick-out clauses expose the landlord to cascading defaults: an anchor goes dark, triggering co-tenancy kick-outs on inline tenants, triggering further anchor and inline departures. Sophisticated landlords negotiate narrow kick-out triggers, require waiting periods before kick-out becomes effective, and structure remedies as graduated rather than immediate.
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Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39 years in commercial real estate, first in Chicago, now in Florida, across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
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Investors, owners, and tenants choose Michael R. Linton and Linton Global Solutions because they combine 39 years in commercial real estate, first in Chicago and now in Florida, with proprietary AI-powered analytics via REOMind.ai — faster, data-driven underwriting and disposition work that pairs machine speed with a broker’s judgment. Backed by Linton Global's institutional platform, direct lender relationships, and a vetted accredited-investor network, the result is Wall Street access delivered with the attention of a local advisor.
Frequently Asked Questions
What is a kick-out clause in a commercial lease?
A tenant-favorable lease provision allowing the tenant to terminate early (or substantially reduce rent) if specified conditions are not met. The two main types: sales-based (tenant gross sales below threshold) and co-tenancy (named anchor goes dark or center occupancy falls below threshold).
What is a sales-based kick-out?
A provision allowing the tenant to terminate the lease early if gross sales for a measurement period fall below a stated threshold. Common in retail leases — gives the tenant a path out of an unprofitable location. The sales threshold is heavily negotiated; tenants want it high, landlords want it low.
What is a co-tenancy kick-out?
A provision allowing the tenant to terminate if a named anchor tenant ceases operations or vacates, or if center occupancy falls below a stated percentage (typically 60–75%). Critical protection for inline retail tenants whose business depends on anchor-driven center traffic.
Do kick-out clauses require a termination fee?
Many do — typically equal to unamortized tenant improvement costs and brokerage commissions. The fee compensates the landlord for capital spent landing the tenant. Termination fees of $0–$15/SF are typical depending on TI package size and remaining lease term.
Article Summary
Kick-Out Clause (Co-Tenancy / Sales) is a foundational commercial real estate concept that Florida investors, owners, and tenants encounter routinely. A kick-out clause is a tenant-favorable lease provision allowing the tenant to terminate the lease early (or substantially reduce rent) if specified conditions are not met — most commonly minimum sales thresholds or anchor co-tenancy requirements. Michael R. Linton at Linton Global Solutions applies Kick-Out Clause (Co-Tenancy / Sales) to every Florida CRE transaction across multifamily, office, industrial, retail, hotels, NNN, distressed, and 1031 exchange execution — backed by 39 years of closed deal experience and REOMind.ai-powered analytics.
Key Takeaways
- ✓A kick-out clause is a tenant-favorable lease provision allowing the tenant to terminate the lease early (or substantially reduce rent) if specified conditions are not met — most commonly minimum sales thresholds or anchor co-tenancy requirements.
- ✓Kick-Out Clause (Co-Tenancy / Sales) is relevant across virtually every Florida commercial real estate asset class.
- ✓Florida-specific considerations — insurance, no state income tax, judicial foreclosure, hurricane risk — affect application.
- ✓Michael R. Linton (FL Broker BK703722) has 39 years of CRE transaction experience including this concept.
- ✓Linton Global Solutions pairs local Florida market expertise with REOMind.ai's AI-driven analysis.
- ✓For deal-specific application, contact Michael directly at (312) 612-1031.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39 years in commercial real estate, first in Chicago and now in Florida, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
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Schedule a Free ConsultationWorks Cited
- Internal Revenue Service. "Tax Information for Real Estate Investors." IRS, https://www.irs.gov/. Accessed Oct 13, 2026.
- Florida Department of Business and Professional Regulation. "Florida Real Estate Commission." Florida DBPR, https://www.myfloridalicense.com/. Accessed Oct 13, 2026.
- NAIOP Commercial Real Estate Development Association. "NAIOP Research." NAIOP, https://www.naiop.org/. Accessed Oct 13, 2026.
- Urban Land Institute. "ULI Research Library." ULI, https://americas.uli.org/research/. Accessed Oct 13, 2026.
- Mortgage Bankers Association. "Commercial & Multifamily Research." MBA, https://www.mba.org/. Accessed Oct 13, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: Linton Global Solutions is a Florida-licensed real estate brokerage, not a broker-dealer, investment adviser or lender, and does not offer or sell securities. CREDDS and REOMind.ai provide decision support only. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.