Net lease glossary
Kick-Out Clause
A lease provision letting the tenant, or sometimes the landlord, terminate early if a stated condition is met, such as sales falling below a threshold.
A kick-out clause grants an early termination right tied to a condition. The most common version lets a retail tenant terminate if annual sales fail to reach a stated level by a certain lease year. Landlord kick-outs may allow termination for redevelopment. Because a kick-out can effectively shorten the lease term, investors and lenders often underwrite the lease to the earliest possible termination date rather than the stated expiration.