Glossary

Landlord Recapture Right

Also known as: recapture clause

A lease clause giving the building owner the option to terminate the tenant's lease over the space the tenant proposes to sublease or assign, and take that space back directly, rather than consenting to the proposed transaction.

Recapture rights let a landlord capture the upside of a rising market directly instead of allowing a tenant to profit from subleasing space at a rent above its own lease rate, and they function as significant leverage in negotiations because a tenant seeking to shed space it no longer needs may be blocked from doing so on its own terms if the landlord recaptures instead. Because recapture can strand a tenant that had lined up a specific subtenant or that needs the sublease income to offset its own occupancy cost, tenants with real negotiating leverage push to narrow recapture rights — limiting them to full-floor or whole-premises sublease scenarios, excluding subleases to affiliates, carving out short-term or partial subleases, or requiring the landlord to exercise recapture within a tight notice window or lose the right for that transaction.