10 Years Lease
I’m trying to lease a store and landlord wanna do 10 years lease, so I requested opt out clause after 5 years, he agreed but with 6 months penalty, I tried to do 3 months instead but he declined. Is 6 months penalty reasonable ? 
Thanks
[{"id": "ewdvc53", "text": "6 month is reasonable due to how long it can take to lease a space. How large is it and what is the use? Is he offering much of a tenant allowance?", "replies": [{"id": "ewdviri", "text": "It\u2019s 1125 sf and use for pharmacy, landlord paying 30$/sf for build out", "replies": [{"id": "ewdvviq", "text": "What is going to be the rental rate? Based on the size and the minimal buildout, you could just say you\u2019re only willing to sign a five year lease but with one or two 5 year options to pick up maybe.", "replies": [{"id": "ewdw35n", "text": "Rate is 22.5/sf. It was 25$/sf but he got rate down because he prefers 10 years with opt out option. He doesn\u2019t wanna do 5 years", "replies": [{"id": "ewdwf0i", "text": "Maybe agree but bargain for a few months free rent? His payback period is only  a little over a year. Are you worried that your pharmacy won\u2019t make it?\n\nWe have some clauses in our lease that allows a tenant to terminate if their sales say fall below a certain level.", "replies": [], "depth": 5}, {"id": "ewe7pgq", "text": "Dang, he conceded $148,500 in rent for just the first 5 years.  There's 6 months of rent.  If you stay the 10 years you'll be getting one year free!", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "ewh7dln", "text": "I would hate to have a pharmacy as a tenant. I\u2019m own a few pharmacies and this industry is getting blindsided terribly.", "replies": [{"id": "exk1q30", "text": "Can you elaborate? We were looking at CVS\u2019 and Walgreens. However between there being a ton of them on the market and closures in the headlines I think I have convinced my partner to run from them, but he thinks that since so many of them are on the market, there might be an opportunity?", "replies": [{"id": "exknamw", "text": "Depending where you are on the chain of pharma, being the dispenser (which most people are familiar with) or retail pharmacy is probably the worst place to be in this industry right now. If you're looking to invest in commercial real estate and the main anchor is pubically traded company like CVS or Walgreens, I would consider investing in it. If there is a mix-mash of tenants and there is a pharmacy there that is a mom-pop, I would be hesitant. You are correct that there are some stores being closed down; Walgreens to my knowledge has closed roughly 4000 national stores. (Please do not direct quote me on this number).", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ewdyiac", "text": "He may want the 10-year lease so he can list the property for sale and make it look more attractive to a buyer.\n\n\"10 years left on lease\" sounds better than \"5 years left on lease\" and then he puts the right to cancel in small print.", "replies": [], "depth": 1}, {"id": "ewe3r9y", "text": "Not reasonable. He negotiated a 5 year deal where he gets an extra 6 months rent if you leave.", "replies": [], "depth": 1}, {"id": "ewe4ndx", "text": "There is no way to answer this without knowing your local market, but in general a landlord recoups their up front costs of commission, tenant improvement allowance and abatement over the full term of the lease. If you are shortening it, most landlords at minimum want to recover the remaining costs for the above that your rent is no longer covering plus some time to find a replacement tenant.", "replies": [], "depth": 1}, {"id": "ewe4yby", "text": "Once you hit 5 years, you\u2019ll have the ongoing right to terminate but still have possession of the space for 5 more years. That is a favorable position to be in as a tenant and it makes it difficult for the landlord to sell or refinance the property, especially if you\u2019re the only tenant. A 6 month termination fee is reasonable. You could also renegotiate later on for a lease amendment if the landlord wants something\u2014\u201cwe want a 3 month termination fee and we\u2019ll report sales every month.\u201d This way the landlord knows your health and can plan to retenant the space. However, providing sales can work against you if you\u2019re doing really well.", "replies": [], "depth": 1}, {"id": "ewf2p9a", "text": "Reasonable you're clearly in a major city. 3 mos security is in place. If shit hits the fan you're going to burn through the security. Yes he can sue for whole amount but landlords won't if there's nothing in the pot.\n\n  \n\n\nIf you're out growing out the space and doing great, then why cares about the notice time. You are going to need more than that.", "replies": [], "depth": 1}]