8C — November 25 - December 8, 2016 — Shopping Centers — M id A tlantic
Real Estate Journal
www.marejournal.com
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By Thomas S. Onder, Esq. and Adam J. Siegelheim, Esq., Stark & Stark Namaste – Ensuring a yoga studio lease vinyasa flows
Y
oga studios, like other non-traditional use spaces, can have a posi-
reviewed and negotiated first. HVAC Systems Some yoga studios offer “hot”
August on a Saturday after- noon could be too hot for some yogis, meaning paying custom-
pairs and/or upgrades. Will it be the tenant or landlord, and will the tenant be taking the
upside of this is that you can get a nice influx of foot traffic after class lets out, as custom- ers leaving mill around the rest of your center to stop at the coffee shop next door or the pharmacy a few stores away. However, that also means that a significant number of parking spaces in the lot could be taken at peak class hours. Discussing designated parking is key to ensuring a proper bal- ance at the center. Medical Services Some yoga studios offer therapies that may be consid- ered medical services, which may require compliance with federal and state laws. For ex- ample, the Health Insurance Portability and Accountability Act (“HIPAA”) protects the pri- vacy of individual medical re- cords. Ensure that your lease includes specific provisions to protect that staff do not violate HIPPA, by setting guidelines for protection of information. In addition, be aware of the Stark Law and Anti-Kickback Statute. For instance, providing a value for referral customers or permitting percentage rent can trigger these violations, which will cost you penalties and fines. Use and Zoning This is an important ques- tion to determine from the start: what will the studio be used for? Is it simply yoga classes or will the studio also be selling merchandise, coffee, juices, smoothies, etc.? Con- firming that the use does not violate other tenancies and/or land use, licensing, and other laws is necessary to know be- fore signing the lease. For example, a yoga studio selling coffee and juice could violate a restriction that only permits the coffee shop in your center to sell java. In addition, zoning issues can arise, such as ADA compliance, obtaining Certificate of Occupancy and improvements. If it is deter- mined that a variance, license, or other approval is required, who will be responsible to ob- tain it and when? Yoga studios offer a real op- portunity to balance the center with lease revenues and en- hanced foot traffic. These are just a few issues to review and discuss when negotiating the lease. Careful review upfront can ensure a peaceful and profitable tenancy – Namaste. Thomas S. Onder, Esq. and AdamJ. Siegelheim, Esq. are attorneys at Stark&Stark in Lawrenceville, NJ. n
tive impact for a center. A p o pu l a r s tudi o can b r i n g n o t only revenue f r o m t h e lease itself, but also in- creased foot
yoga classes that “crank up” the heat. B e s i d e s breaking the yogis’ sweat, these types of classes can put a toll on HVAC sys-
“Yoga studios offer a real opportunity to balance the center with lease revenues and enhanced foot traffic. These are just a few issues to review and discuss when negotiating the lease.”
ers won’t show up. Knowing the standard operating hours for the HVAC system against the standard hours of the yoga studio can assist how the ten- ant can use the HVAC outside of standard operating hours without breaking its budget. Further, it is essential to know who will handle the re-
space “as is” or will HVAC be part of improvements? One win-win solution could be to negotiate the installation of a supplemental HVAC unit to allow the yoga studio control of its own temperature. Parking Yoga studios offer classes at certain designated times. The
Thomas Onder Adam Siegelheim
traffic to a center at specific times during the week. How- ever, before yoga customers (or yogis) start their “downward dog” poses, a number of impor- tant lease provisions should be
tems. Further, some studios operate in commercial space that may only provide HVAC during the work week for the whole building. For instance, a yoga class in the middle of
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