💡 Plain English Explanation

This clause protects sensitive tenant-related information that is critical in commercial real estate transactions. Rent rolls, lease abstracts, tenant financial data, and occupancy details are among the most valuable and sensitive information shared during property acquisitions and refinancings.

Tenant data reveals not just current income but also lease expiration risks, tenant creditworthiness, and future cash flow stability. Competitors could use this information to poach tenants, and tenants themselves may have confidentiality provisions in their leases that restrict disclosure of their rental terms.

Critical tenant information typically includes:

⚠ Why This Clause Matters

For Property Sellers: Your tenant relationships and lease terms represent years of negotiation and relationship building. Disclosure to competitors could result in tenant solicitation, and leaked below-market rents could trigger tenant demands for concessions.

For Buyers: You need comprehensive tenant data to underwrite the investment accurately. However, you also need protection for your analysis of tenant quality and your strategies for lease renewals or tenant replacements after acquisition.

Legal Compliance: Many commercial leases contain confidentiality provisions restricting disclosure of tenant information. Violating these provisions could expose the seller to breach of contract claims from tenants and damage valuable tenant relationships.

📄 Clause Versions

Balanced Version: Provides comprehensive protection for tenant data while allowing necessary due diligence activities. Includes standard provisions for protecting tenant relationships and lease confidentiality. 
"Tenant Data" means all non-public information relating to tenants, leases, and occupancy of the Property, including but not limited to:

(a) Rent rolls, including base rent, percentage rent, additional rent, and all other charges payable by tenants;
(b) Lease documents, amendments, guaranties, subordination agreements, and estoppel certificates;
(c) Lease abstracts summarizing material terms, renewal options, termination rights, and tenant improvement obligations;
(d) Tenant contact information, correspondence, and relationship history;
(e) Tenant financial information, including sales reports, financial statements, and credit data;
(f) Accounts receivable, payment history, and delinquency information;
(g) Tenant improvement costs, concessions, and inducements; and
(h) Pending or contemplated lease negotiations, renewals, or modifications.

The Receiving Party agrees to:
(i) Use Tenant Data solely for evaluating the potential acquisition of the Property;
(ii) Not contact any tenant directly without the prior written consent of the Disclosing Party;
(iii) Limit disclosure of Tenant Data to representatives with a genuine need to know;
(iv) Comply with any confidentiality provisions contained in tenant leases; and
(v) Upon request, confirm in writing that no copies of Tenant Data have been retained.

The Receiving Party acknowledges that disclosure of Tenant Data may violate confidentiality provisions in tenant leases and could damage the Disclosing Party's tenant relationships.
Disclosing Party Favor: Maximum protection for tenant relationships and lease information. Strictly limits disclosure, prohibits tenant contact, and includes provisions for protecting against tenant solicitation. Use when selling a property with valuable anchor tenants. 
"Tenant Data" means any and all information, in whatever form, relating to any current, former, or prospective tenant of the Property, including without limitation:

(a) All rent rolls, operating statements, and financial reports reflecting tenant payments or obligations;
(b) All leases, amendments, guaranties, letters of credit, security deposits, and related documents;
(c) All tenant correspondence, meeting notes, and communications of any nature;
(d) All tenant financial information, including sales reports, audited financials, credit reports, and payment history;
(e) All information concerning lease negotiations, renewals, expansions, or terminations, whether pending, contemplated, or historical;
(f) All tenant contact information, including names, addresses, phone numbers, and email addresses of tenant representatives;
(g) All information concerning tenant disputes, defaults, workouts, or litigation; and
(h) All analyses, compilations, or summaries prepared by the Receiving Party that contain or reflect Tenant Data.

The Receiving Party covenants and agrees that:
(i) It shall not, directly or indirectly, contact, solicit, or communicate with any tenant without the express prior written consent of the Disclosing Party, which consent may be withheld in the Disclosing Party's sole discretion;
(ii) It shall not disclose any Tenant Data to any person or entity other than legal counsel directly involved in the transaction;
(iii) It shall not use Tenant Data for any purpose other than evaluating the acquisition of the Property;
(iv) For a period of two (2) years following termination of discussions, it shall not solicit, induce, or attempt to induce any tenant to relocate, terminate its lease, or modify its lease terms;
(v) It shall indemnify the Disclosing Party for any damages arising from breach of tenant lease confidentiality provisions; and
(vi) Upon termination of discussions, it shall certify in writing the destruction of all Tenant Data and derivative materials.

The Receiving Party acknowledges that certain tenant leases contain confidentiality provisions, and that breach of this Agreement may expose the Disclosing Party to liability under such provisions.
Receiving Party Favor: Narrower definition focused on truly sensitive tenant information. Permits reasonable due diligence activities including supervised tenant contact. Excludes publicly available tenant information. 
"Tenant Data" means only the following categories of information:

(a) Specific rental rates, percentage rent breakpoints, and tenant improvement allowances not publicly available;
(b) Non-public tenant financial statements and credit information provided under confidentiality agreements with tenants;
(c) Security deposits and letter of credit details; and
(d) Material lease provisions that the Disclosing Party identifies in writing as subject to confidentiality requirements under the applicable lease.

Tenant Data expressly excludes:
(i) The identity of tenants occupying the Property, which is observable or publicly known;
(ii) General lease terms that are standard in the market;
(iii) Information available from public records or tenant SEC filings;
(iv) Tenant contact information available from public sources; and
(v) Information previously known to the Receiving Party or independently obtained.

The Receiving Party may:
(i) Disclose Tenant Data to its officers, employees, attorneys, accountants, lenders, and consultants involved in evaluating the transaction;
(ii) Contact tenants with the Disclosing Party's consent, which shall not be unreasonably withheld for credit tenants;
(iii) Verify tenant information directly with publicly-traded tenants through public channels; and
(iv) Retain tenant analysis prepared by the Receiving Party as its own work product.

Any non-solicitation restriction shall be limited to twelve (12) months and shall apply only to tenants identified by name in an exhibit to this Agreement.

💬 Key Considerations