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Commercial Real Estate, Real Estate

Why Exclusivity Clauses Are Important in Retail Properties

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Landlords Want to Ensure Compatibility Among Tenants

For commercial landlords and their retail tenants, shop­ping centers operate like ecosystems, with each retailer occupying its own ecological niche.

Successful centers typically have some stores that cover a lot of square footage and sell a wide variety of products at competi­tive prices, without specializing in any par­ticular line of merchandise.

These anchor tenants attract regional shop­pers who also patronize smaller stores that sell specific kinds of goods, such as house­hold furnishings, clothing, or pet supplies. Add some restaurants, specialty shops, and banking and financial establishments, and the resulting tenant mix can generate customers and sales, creating a win-win-win for the cen­ter’s developers, investors, and retail tenants.

Even Housing Can Be Restricted

To achieve this success, many retail ten­ants require landlords to prohibit or limit certain activities within the center.

Noxious uses such as composting centers and fireworks factories are clearly undesir­able and will be prohibited. But many val­ued, consumer-friendly uses are also rou­tinely banned from shopping centers.

Examples include schools, places of wor­ship, and fitness centers, which can contrib­ute to disruptive parking and traffic prob­lems. Even housing on nearby properties controlled by landlords is often restricted, because homeowners and residential ten­ants can file nuisance complaints about the noise, odors, lighting and rodents associated with shopping centers.

Landlords and tenants should not rely on local zoning laws to restrict undesirable uses at shopping centers. Zoning laws can be compromised by zoning amendments, variances and lax enforcement.

A vacant storefront in the North Market building at Faneuil Hall Marketplace in Boston.

The most effective way to prevent un­wanted activities is through binding agree­ments added to leases and restrictive cove­nants, which give landlords and tenants legal rights to directly seek court orders en­joining problematic uses, without depending on local government action.

In addition to prohibiting noxious and other incompatible uses, major tenants usu­ally insist that shopping center leases grant them exclusive rights to operate their stores without competition from other tenants. Many retail leases include lengthy interlock­ing lists of prohibited uses, exclusive uses and permitted uses, designed to regulate which tenants can sell what products and services.

This can result in complicated and con­fusing regimes of exclusive use clauses in multiple leases, so retail landlords often must ask existing tenants for consents or waivers, before bringing in new tenants to fill vacant space.

Landlords Have Legal Options

When so-called “rogue tenants” disregard exclusives, many retail leases obligate land­lords to file suit and seek injunctive relief against the violators. Those leases fre­quently allow aggrieved tenants to claim rent abatements, liquidated damages or lease termination rights against landlords that fail to stop rogue tenants.

It can be frustrating for landlords when tenants with exclusives default, abandon their premises or “go dark” (that is, cease op­erations without relinquishing their space).

Landlords negotiating exclusives should reserve for themselves rights to terminate ex­clusives when tenants are not utilizing them, so the landlords can find other tenants will­ing to offer the goods and services that non-operating tenants cease to make available.

From the tenant’s perspective, exclusive rights must be vigilantly guarded, and ag­grieved tenants should promptly contest vio­lations. Specialty Retailers, Inc. v. Main Street, NA Parkade, LLC, decided by a fed­eral court in Massachusetts in 2011, is in­structive.

Specialty Retailers’ commercial lease pro­hibited its landlord from leasing more than 5,000 square feet in a North Adams shopping center to another tenant selling off-price merchandise. Despite this restriction, the landlord signed a lease with Label Shopper, an off-price retailer. Specialty Retailers ac­quiesced in this violation for 18 months, and even negotiated an amendment to its lease during that period, before taking action to enforce its exclusive.

A jury agreed that the landlord’s lease to Label Shopper breached Specialty Retailers’ exclusive, but found that Specialty Retailers waived its right to contest the breach be­cause it waited too long to contest Label Shopper’s operations.

Specialty Retailers asked the judge to set aside the jury verdict, arguing that its deci­sions on enforcing exclusives were made at its corporate headquarters in Houston, where its executives were unaware of the vi­olation. Specialty Retailers maintained that it lacked sufficient knowledge of the viola­tion to waive its exclusive.

The judge disagreed with that argument, observing that Specialty Retailers’ vice pres­ident of operations, district manager, and on-site personnel knew about Label Shop­per’s business activities long before object­ing. Therefore, the jury could attribute their knowledge to Specialty Retailers as a corpo­rate entity. The judge upheld the jury’s ver­dict on the waiver issue.

The lesson here is that national retailers with faraway corporate offices should make sure they have local eyes on the ground to monitor compliance with exclusives. If re­tail tenants snooze, they can lose.

Download the article as seen in Banker & Tradesman on April 27, 2026. Learn more about Christopher R. Vaccaro.

Commercial Real Estate, Real Estate

Starter Home Question Could Catalyze Construction

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Overrides Minimum Lot Size Regulations

 

Two recent amend­ments to the Zon­ing Act were in­tended to alleviate the housing shortage in Mas­sachusetts, but a poten­tial game-changer is on the horizon in the form of an initiative petition.

The MBTA Communities Act of 2021 re­quired cities and towns with access to MBTA service to establish zoning districts of reasonable size where multifamily housing is permitted as of right. The districts must be located near commuter rail stations, sub­way stations, ferry terminals or bus stations, and must allow a minimum gross density of 15 dwelling units per acre.

The Executive Office of Housing and Liv­able Communities (EOHLC) promulgated guidelines for implementation of this statute, requiring all MBTA communities to submit applications to EOHLC for determinations of compliance by the end of last year. Most of the 177 municipalities subject to the statute complied, but a handful refused. Those com­munities now face enforcement actions by the Massachusetts attorney general’s office.

Last year’s Supreme Judicial Court decision in Attorney General v. town of Milton ruled that the attorney general can sue non-compli­ant municipalities for declaratory and injunc­tive relief to enforce the statute. After that rul­ing, Milton quickly adopted the required zoning. The remaining non-compliant commu­nities are expected to fall into line eventually.

ADUs Legalized in Affordable Homes Act

Voters could have the chance to legalize construction of homes up to 1,850 square feet on a broader array of parcels on a statewide basis in November.

The Affordable Homes Act (AHA) of 2024 made additional changes to the Zoning Act. It allows accessory dwelling units as of right in single-family zoning districts throughout Massachusetts, but not Boston.

It also restricts the merger doctrine re­garding undersized lots. Under that doc­trine, contiguous small lots that would have been buildable if separately owned, are re­garded as “merged” into a single lot to con­form to more stringent minimum lot size and frontage regulations. The doctrine ren­dered such small lots unbuildable as sepa­rate lots.

Since enactment of the AHA, undersized lots in common ownership cannot be treated as a single lot under local zoning if the lots met existing dimensional require­ments when established by recorded plan, have at least 10,000 square feet of area and 75 feet of frontage, and are located in zoning districts that allow single-family dwellings.

However, homes built on such lots cannot exceed 1,850 square feet of heated living area, must contain at least three bedrooms, and cannot be used as seasonal homes or short-term rentals.

These recent amendments do not affect Boston, with its separate zoning enabling act.

In response to the statewide housing shortage, Boston enhanced the affordable housing mandate in its zoning code, known as “inclusionary zoning.” This mandate re­quires new housing projects with seven or more dwelling units to set aside up to 20 percent of units as income restricted.

These restrictions can impede housing construction, especially when land acquisi­tion and building costs for affordable units (including permitting, financing and con­struction costs) exceed capped sales prices or cannot be recovered from capped rents.

Ballot Question Encourages Starter Homes

The MBTA Communities Act and the AHA are positive steps toward lessening local re­strictions on housing production. But an ini­tiative petition circulating in Massachusetts will have an even greater impact if it ends up on this year’s November ballot and gains enough votes.

The so-called “Legalize Starter Homes” initiative would allow construction of single-family homes as of right on lots having at least 5,000 square feet of area and 50 feet of frontage with access to public water and sewer.

Supporters of this initiative petition began gathering signatures last September. In January the state Elections Division an­nounced that it had certified over 84,000 sig­natures in support of the petition, thus quali­fying it to go before the Massachusetts legislature this year.

The petition may not pass the Legislature, but it can still appear on the November bal­lot if its supporters gather another 12,500 signatures. Many criticize this petition as a blunt instrument to create higher density housing that would burden infrastructure and school systems in municipalities.

Housing scholar Andrew Mikula is a pri­mary sponsor of the initiative petition.

“Because land is so expensive in much of Massachusetts, allowing homes on smaller lots will reduce the housing costs for buyers, because developers won’t need to build giant McMansions to justify the cost of assembling larger lots,” Mikula told me. “That’s a win for anyone who needs a small, low-maintenance, relatively low-cost home in the suburbs, es­pecially young families, downsizing seniors, and first-time buyers of all walks of life.”

There could be two initiative petitions on the ballot this fall that would significantly impact housing in Massachusetts; namely, Mikula’s small-lot petition, and the state­wide rent control petition. Only the former would likely promote housing production.

Download the article as seen in Banker & Tradesman on March 30, 2026. Learn more about Christopher R. Vaccaro.

Corporate & Business Law

Pitfalls Surrounding an M&A Deal

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Brennan Quigley, Esq

Lack of Seller Preparation

The most frequent reason a transaction falls apart is inadequate preparation by the seller. Business owners considering a sale should take several important steps at the outset. They should retain experienced M&A legal and financial advisors, clearly define their objectives, and conduct a comprehensive internal review of the company. This review should include corporate records, financial statements, major contracts, litigation exposure, cybersecurity matters, regulatory compliance, and tax issues. Understanding the company’s true condition — including its weaknesses — reduces the likelihood of unpleasant surprises during due diligence and ensures the information provided to buyers is complete and accurate.

      1. Undisclosed or Hidden Liabilities

One of the most damaging consequences of poor preparation is the discovery of previously unknown liabilities during due diligence. Unexpected legal claims, regulatory noncompliance, tax exposure, or contingent liabilities often trigger renegotiations, price reductions, indemnity demands, or even termination of the deal. Sellers who identify and address these risks before going to market are far more likely to preserve deal value and momentum.

 

Seller Uncertainty or Conflicting Goals

Selling a business — particularly a family-owned or closely held company — can be emotionally taxing. While a transaction may begin with enthusiasm, doubts frequently arise as the closing becomes more tangible. Family members or multiple equity holders may disagree over valuation, post-closing roles, timing, or strategic direction. Personality conflicts and misaligned objectives can quickly stall negotiations.

Experienced advisors play a critical role in managing expectations, aligning stakeholders, and maintaining disciplined communication to avoid deal fatigue or collapse.

Delays in the Deal Process

Time can undermine even well-structured transactions. The longer a deal remains pending, the more vulnerable it becomes to external disruptions such as market volatility, regulatory changes, geopolitical events, or company-specific developments. Delays may stem from insufficient preparation, financing challenges, or expanded due diligence requests. Regardless of the source, prolonged timelines weaken leverage and increase execution risk.

      1. Disputes Over Risk Allocation

Negotiations often slow when parties struggle to agree on how risk should be allocated. Representations and warranties, indemnification structures, liability caps, survival periods, and escrow amounts can become major friction points. Each side seeks protection against pre-closing liabilities, and prolonged disagreements over these provisions can derail momentum.

      2. Working Capital Adjustments

Determining what constitutes “normal” working capital frequently becomes contentious. Disputes may arise over seasonal fluctuations, one-time expenses, accounting methodologies, or proposed add-backs. Without clear agreement on calculation mechanics, negotiations can become heated and materially delay closing.

      3. Employment and Restrictive Covenants

Transactions involving key executives or founders often require employment agreements and restrictive covenants. Heightened scrutiny over the enforceability of non-compete provisions has led to more careful drafting and negotiation. Legal teams are devoting additional time to tailoring these agreements, particularly where key-person risk is significant. These negotiations, while necessary, can extend timelines.

 

Buyer’s Inability to Secure Financing

A transaction cannot close without funding. In today’s environment, access to capital can be challenging, and financing terms may be less favorable than in prior years. Sellers should conduct preliminary diligence on prospective buyers to confirm they have the financial capability and track record to complete acquisitions successfully.

      1. Financing Contingencies

With the increased cost of capital and tighter lending standards, transactions are increasingly dependent on carefully drafted financing provisions. Buyers may require more robust contingency language tied to funding, closing conditions, or representations. If lenders impose additional requirements or withdraw commitments, the deal may stall or fail. Clear and precise drafting around financing obligations and remedies for breach is essential to reduce uncertainty.

 

Conclusion

There are countless reasons why mergers and acquisitions fail to close, but the issues outlined above represent some of the most common challenges in lower and middle-market transactions. More often than not, deals collapse due to a combination of factors rather than a single isolated issue. Poor preparation can lead to hidden liabilities, which may intensify disputes over risk allocation, strain financing, and prolong negotiations — creating a compounding effect that ultimately sinks the transaction.

While it is sometimes prudent to walk away from a flawed deal, no party wants to expend significant time, energy, and expense on a transaction destined to fail. Recognizing early warning signs — whether financial, legal, structural, or interpersonal — allows parties to reassess risk, adjust strategy, and minimize potential losses before it is too late.

 

Next Steps

If you are contemplating a sale, acquisition, or other strategic transaction, early planning and experienced counsel can make the difference between a successful closing and a failed deal. Our M&A team works with business owners, management teams, and investors at every stage of the transaction process — from pre-deal preparation through post-closing integration. To discuss how we can help you navigate your next transaction with confidence, please contact bquigley@dfllp.com.

Commercial Real Estate, Real Estate

Hotel Management Agreements Are Critical for Hospitality Properties

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Terms Protect Lenders, Set Operational Standards

 

It is an understate­ment to say that hotels are different from other commercial real estate investments.

Poorly operated of­fice, retail or industrial properties can neverthe­less be profitable based on locations and leasing alone. Not so with hotels, where property values and profitabil­ity depend on successful branding and hotel management.

Term of HMA

Hotel management agreements (HMAs) differ from franchise agreements. Franchise agreements allow hotel owners to adopt reputable brands, or “flags,” with their asso­ciated goodwill, marketing support, and res­ervations systems. In contrast, HMAs re­quire hotel owners to cede control of their properties to hotel operators, subject to ne­gotiated guardrails involving major deci­sions. Some key HMA provisions are dis­cussed below.

HMAs can last several years, even de­cades, depending upon factors such as fi­nancing requirements, relative negotiating strengths, and financial contributions from the operator. While HMAs do not create in­terests in land, they are usually structured as independent contractor agreements rather than agency agreements, making it difficult and expensive for owners to termi­nate them and install new management un­less the manager is in default. Franchisors always reserve rights to approve manage­ment changes, because such changes can disrupt hotel operations. Most HMAs re­quire hotel owners to pay operators costly termination fees for terminations without good cause.

Management Fees

Base management fees paid to opera­tors often range from 2 to 5 percent of hotel gross revenues. This formula creates tension between owners and operators, because operators receive the same base fee regardless of the hotel’s profitability.  Operators have less incentive to manage costs when their compensation is tied only to revenue and not actual income. For this reason, HMAs often include incentive fees for operators, based on a percentage of the hotel’s net operating income (NOI). Management fees should only be derived from room revenue and core hotel services – not other revenues sources beyond the operator’s responsibilities, such as independently operated restaurants, recreational facilities and spa services.

A 438-room hotel development was approved in January at 371-401 D St. in South Boston near the Menino Convention and Exhibition Center.

Budgeting and Financial Records

Although HMAs give hotel operators control over day-to-day hotel management, hotel owners must stay involved in the an­nual budgeting process for operating costs, capital replacements and property improve­ment plans. Hotel owners need to monitor their hotels’ financial performance as part of the budgeting process. They should expect regular financial reporting from hotel opera­tors, with audited financial reports on an an­nual basis for larger hotels.

Performance Standards

The hotel industry has developed a set of accounting standards for hotels, known as the Uniform System of Accounts for the Lodging Industry. HMAs should reference these standards and allow hotel owners ac­cess to operators’ books and financial re­cords to confirm compliance.

Hotel owners often want to terminate HMAs when properties fail to deliver ad­equate returns on investment. Operators push back against owner termination rights, because a hotel’s underperformance might be unrelated to the operator. Fires and other casualties, labor disruptions, pandemics and permitting problems prevent hotels from meeting expectations, but are usually be­yond operators’ control. Disappointing re­sults also arise when owners fail to provide financial support or lose their flags because of a breach of their franchise agreements. Owners can negotiate termination rights when properties fail to meet specific perfor­mance standards over a sustained period. Performance standards can be tied to met­rics such as a hotel’s NOI, revenue per avail­able room (RevPAR), or average daily rate per room sold (ADR), and how those met­rics compare with a hotel’s identified com­petitors or other benchmarks. If the hotel underperforms, and the problem persists after notice to the operator, the owner can invoke contractual remedies that might in­clude termination of the HMA or require the operator to make financial accommodations to the owner.

Subordination, Nondisturbance and Attornment Agreements

Institutional lenders that make loans to hotel owners never want to end up manag­ing a foreclosed hotel property. Nor do oper­ators want to lose a profitable HMA because of an owner’s loan default. Accordingly, lenders and hotel operators expect owners to obtain subordination, nondisturbance, and attornment agreements (SNDAs), where op­erators agree to recognize the institutional lender’s rights and commit to managing the hotel if the lender acquires it by foreclosure. A frequent area of negotiation in SNDAs is whether the lender can terminate the HMA on a distressed property. SNDAs for brand managed hotels will usually require the lender to keep the branded operator in place.

Choosing hotel operators and negotiating HMAs are among the most important deci­sions that hotel owners make. Experienced owners know how to navigate this process. Investors new to the industry should seek advice from consultants and attorneys with that specific expertise.

Download the article as seen in Banker & Tradesman on February 23, 2026. Learn more about Christopher R. Vaccaro.

News

Position Available

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Real Estate/Litigation Associate

Company Overview

Dalton & Finegold is a mid-sized law firm dedicated to providing exceptional legal services across various practice areas. Our commitment to client satisfaction and professional integrity drives our approach to legal representation.

Job Description

Seeking a motivated and detail-oriented Attorney to join our Andover office. This is a hands-on, in-office role working closely with a Partner in the firm and playing a key role in the day-to-day management of a well-established Real Estate and Civil Litigation practice representing residential and commercial professional management companies, private landlords, and real estate developers. The ideal candidate is highly organized, capable of working independently, and comfortable managing multiple priorities in a fast-paced legal environment.

Key Responsibilities

  • Drafting pleadings, motions, discovery responses, agreements, and correspondence
  • Negotiating settlements
  • Routine Court appearances including mediation, motion practice, and trial work
  • Daily client communication

Qualifications & Requirements

  • Juris Doctor (JD) and admission to the Massachusetts Bar required
  • Strong ability to work independently, exercise sound judgment, and manage matters in a supportive environment
  • Excellent organizational skills with the ability to prioritize tasks and meet deadlines
  • Strong written and verbal communication skills
  • Detail-oriented with a proactive and professional approach to client service
  • The ideal candidate is comfortable co-managing cases as part of a collegial team
  • Working knowledge of Massachusetts Rules of Civil Procedure and Uniform Summary Process Rules
  • Automobile required

Work Schedule & Location

  • Full-time, in-office position
  • Monday through Friday, 8:30 AM – 5:00 PM
  • Andover, Massachusetts office

 

Applicants should submit their resumes to Info@DFLLP.com or click here to read more information and apply on Indeed

Commercial Real Estate, Real Estate

Springfield Ties Future to Gaming

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Former Manufacturing Center Still Bets on MGM Casino

 

Massachusetts law defines “Gate­way Municipali­ties” as those having pop­ulations between 35,000 and 250,000, where me­dian household incomes and percentages of resi­dents with bachelor’s de­grees are below the state average.

Situated in western Massachusetts on the Connecticut River, Springfield has more than 150,000 residents, making it the fourth-largest city in New England after Boston, Worcester and Providence.

The city once hosted manufacturing sites for motorcycles, railway cars and automo­biles, including Rolls-Royce luxury vehicles. Springfield still has a Smith & Wesson fire­arms factory, although that manufacturer’s headquarters and much of its manufacturing capacity recently relocated to Tennessee. Massachusetts Mutual Life Insurance Com­pany and Meriam-Webster continue to call Springfield home.

Springfield has also made noteworthy cul­tural contributions. It is the birthplace of bas­ketball and Theodor “Dr. Seuss” Geisel, and it offers museums honoring both of them. The American Hockey League, a minor league that develops players for the National Hockey League, is headquartered in Springfield.

Also, since 2018, Springfield has been the home of the MGM Springfield resort casino.

Stiff Upfront Payments for State License

Legalized casino gambling is a recent phe­nomenon in Massachusetts. The common­wealth passed legislation in 2011 allowing up to three destination resort casinos and one slot parlor in Massachusetts.

This legislation did not legalize casino gambling outright. Instead, it created a regu­latory environment where a few well-fi­nanced applicants could secure casino li­censes after prevailing in a demanding bidding process and paying hefty sums to state and local governments.

As a result, Massachusetts is now home to MGM Springfield and Encore Boston Har­bor in Everett, both of which offer full ca­sino gambling, as well as Plainridge Park Casino, a slot parlor in Plainville.

A downtown casino project is one of the most significant developments in Massachusetts’ second-largest Gateway City, Springfield.

The Massachusetts Gaming Commission is the state agency responsible for regulat­ing the gaming industry. It awarded a resort- casino license in 2014 to Blue Tarp Redevel­opment LLC, an MGM affiliate. At the time, MGM was already actively acquiring prop­erty in Springfield.

The award of the western Massachusetts casino license to MGM accelerated its acqui­sition of a 14-acre site surrounded by State Street, Main Street, Union Street and Inter­state 91 in Springfield. This site had been heavily damaged by a rare Massachusetts tornado in 2011.

After assembling the casino site, Blue Tarp transferred it to MGM Springfield Re­development LLC, a limited liability com­pany established under Massachusetts Gen­eral Laws Chapter 121A. That statute offers developers who invest in blighted areas ex­emptions from real estate tax assessments, in exchange for fixed alternative payments.

MGM paid dearly for its casino gambling license. Its licensing fee was $85 million, and it committed to a $500 million capital in­vestment in its casino-hotel. The common­wealth receives 25 percent of gross gaming revenues from the casino.

MGM Springfield also entered into a host agreement with the city of Springfield, requir­ing an advance payment of over $15 million, plus annual community impact payments, de­velopment grants, Chapter 121A payments and other commitments totaling some $26 million per year. The host agreement re­quired MGM Springfield to create at least 2,000 construction jobs and 3,000 permanent jobs, with positions reserved for local resi­dents, minorities, women, and veterans.

Beyond Slots, Resort and Convention Space

The completed project includes a 251- room hotel and 125,000 square feet of gam­ing space with over 1,500 slot machines, a poker room and table games. The facility also includes ample retail and convention space, and a parking garage.

In 2023, MGM Springfield opened a sports book after paying the commonwealth another $5 million for a five-year sports wagering li­cense, for which the casino pays a 15 percent tax on gross sports wagering revenue. Bet­MGM also obtained a sports wagering license tethered to the casino, under which it pays a 20 percent tax on gross wagering revenue.

According to the Massachusetts Gaming Commission’s public records, MGM Spring­field generated over $272 million in total gaming revenue and $68 million in Massa­chusetts taxes in each of 2023 and 2024. About three-quarters of this revenue comes from slot machines. Most of the sports book revenue is derived from BetMGM.

In 2024, the first full year that the casino had a sports wagering license and for which figures are available, BetMGM generated over $41 million in taxable revenue and al­most $8 million in taxes.

The tax revenues and impact fees from MGM Springfield and other licensed casinos are dedicated to local aid, education, health­care, transportation and other worthy gov­ernment priorities. This revenue will poten­tially make positive differences throughout the commonwealth.

Still, to some Massachusetts residents, Springfield will always be thought of as the hometown of basketball, Dr. Seuss and the American Hockey League.

Download the article as seen in Banker & Tradesman on January 26, 2026. Learn more about Christopher R. Vaccaro.

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