📖 Commercial lease glossary
Go-Dark Clause
A go-dark clause is a lease provision that deals with a tenant ceasing retail operations at the premises while remaining liable under the lease. In practice it takes two related forms: an affirmative continuous-operation covenant requiring the tenant to stay open during stated trading hours, or a negative restriction barring closure for more than a defined period. If the tenant breaches, the landlord can typically terminate, convert rent to a higher fixed alternative, enforce the covenant directly, or exclude the dark unit from co-tenancy counts.
How go-dark and continuous-operation provisions work
The clause exists because a shopping center is worth more as a set of open stores than as a set of paying ones. A dark storefront depresses foot traffic, weakens sales at neighboring units, can trip co-tenancy thresholds written into other leases, and signals decline to every other tenant in the center — even while the closed tenant keeps paying. Landlords therefore negotiate the right to insist on operation, not just on rent.
The drafting comes in two flavors. An affirmative covenant states that the tenant "shall continuously open and operate" its retail business throughout the term during defined trading hours, with enumerated exceptions. A negative restriction defines the breach in days: the tenant shall not cease to operate for more than, say, five consecutive trading days or thirty non-consecutive days in any twelve-month period. Breach gives the landlord an election of remedies — most commonly a right to terminate after notice and a short cure period, rent conversion to a stated fixed alternative (usually higher than percentage rent would be) while the premises stay dark, and in anchor leases sometimes specific performance, since damages for a dark anchor are notoriously hard to prove.
Anchor versions are longer and behave differently. An anchor's covenant is frequently written to survive assignment, so the anchor cannot escape it by handing the lease to a weaker operator, and it is paired with a going-out-of-business-sale restriction limiting clearance sales to a short window. The rent flip in an anchor lease typically moves the tenant from percentage rent to an alternative minimum equal to a historical peak or a stated per-square-foot figure — making going dark expensive rather than merely prohibited. And because center-wide co-tenancy clauses count operating space rather than leased space, a dark anchor can hand every inline tenant rent reductions or kick-out rights even while the anchor itself keeps paying.
Where go-dark provisions appear
- ✓Inline mall and lifestyle-center leases: the standard landlord ask — a continuous-operation covenant or a maximum-closure restriction with termination and rent-flip remedies
- ✓Anchor and junior-anchor leases: covenants that survive assignment, going-out-of-business limits, alternative-rent conversion, and specific-performance remedies
- ✓Interaction with exclusive-use clauses: the tenant's own exclusivity can block the landlord from re-letting to a same-use retailer after terminating a dark tenant, which is why the two clauses have to be read together
- ✓Co-tenancy definitions: many center leases count only open, operating square footage, so a go-dark event cascades into other tenants' remedies
- ✓Office and industrial leases: continuous-operation covenants are rare — the tenant can usually sit empty and pay — so a lease phrased as "must operate" is almost always retail, and abstracts should not import go-dark logic into office terms
Worked example: an apparel tenant stops trading
A national apparel retailer occupies 4,000 square feet in a open-air lifestyle center at $24 per square foot base rent plus 6% of gross sales over a natural breakpoint. The lease requires the tenant to "open and operate for retail sales purposes" during the center's trading hours and prohibits ceasing operation for more than five consecutive trading days without landlord consent. Permitted closures: nationally observed holidays, casualty restoration, government order, and up to 60 days for a remodel announced 30 days ahead.
In June the tenant pulls its merchandise and boards the storefront pending a merchandising decision at headquarters. It keeps paying base rent, so on the rent roll it looks current. The landlord serves a go-dark notice under the remedies section: the tenant has 30 days to resume trading, failing which rent converts for the remainder of the dark period to a fixed alternative of $32 per square foot and the landlord may terminate on a further 30 days' notice.
The tenant does not reopen — it has no inventory plan for the center — so the landlord terminates, retakes the unit, and re-lets it to a boutique operator. Under the lease's early-termination terms the tenant remains liable for the unamortized tenant improvement allowance and the landlord's re-letting costs. Now compare a lease without the covenant: the landlord's only leverage would be co-tenancy pressure on its other tenants and the slow death of foot traffic, with a paying-but-dark unit it cannot legally reclaim.
Negotiating the covenant and abstracting traps
Tenants fight continuous-operation covenants outright where they can, and constrain them where they cannot. The standard asks: exceptions for casualty, condemnation, government orders, and force-majeure-style shutdowns; a permitted remodel window; a cure period measured in weeks, not days; landlord consent to closure deemed given if not answered within a set time; and limits on remedies — for example, rent conversion but no termination during the first years of the term. Strong tenants also delete the specific-performance remedy, since being enjoined to restock a store is operationally ruinous.
For abstracting, the mechanics almost never live in a section labeled "go-dark." They are scattered across the continuous-operation or covenant-to-operate article, the use clause, operating-hours language, landlord remedies, the percentage-rent reporting covenants, and the co-tenancy definitions in other parties' leases. The fields that drive decisions: whether a covenant exists at all, the maximum permitted closure (consecutive and cumulative), the enumerated exceptions, notice and cure periods, the remedy set (termination, alternative rent and at what level, specific performance), survival on assignment, and any going-out-of-business sale limits. A present/absent flag on "go-dark clause" loses every one of those. A common error in the other direction is abstracting an office or industrial lease as go-dark-restricted because the use clause says "shall be used only for..." — a use restriction is not an obligation to operate.
Portfolio-wise, anchor go-dark exposure belongs on the same critical-date calendar as kick-out test dates, because one anchor's closure can trigger rent reductions across dozens of inline leases at once. Lease administration teams should know which leases count operating space rather than leased space in their co-tenancy formulas before the first anchor board goes up.
Frequently asked questions
What counts as "going dark" in a lease?
Ceasing to operate the tenant's retail business at the premises — not abandoning the lease and not necessarily vacating. A tenant can keep paying rent, keeping staff in a back office, and still be legally dark if it is not open for retail sales as the covenant requires. Whether a going-out-of-business clearance sale counts as operating depends on the clause wording; many covenants permit a defined sale period, and some treat it as a breach once the tenant stops carrying regular stock.
Is a go-dark clause the same as a continuous-operation covenant?
They are two faces of the same bargain. The continuous-operation covenant is the tenant's promise to stay open; the go-dark clause is the landlord's response when it breaks — the definition of a breach in days plus the remedy set. Many leases contain both in separate articles, which is why abstracting them as a single field misses the cure periods, exceptions, and remedies that actually control the outcome.
Does a tenant that goes dark still have to pay rent?
Yes. Unless and until the landlord terminates, the lease stays alive and rent keeps running — commonly at a converted fixed alternative level that is higher than the percentage rent the tenant would have paid open. Going dark does not excuse rent the way casualty destruction or a landlord default might excuse it under an abatement or constructive-eviction analysis; the tenant made a business decision, and the lease prices it.
What happens when an anchor tenant goes dark?
Two things at once. The anchor faces its own covenant remedies — usually a steep rent flip and a landlord termination right, often after longer notice periods than inline tenants get. Meanwhile the rest of the center feels the effects: if other leases define co-tenancy by operating space, their tenants may drop to reduced rent or acquire kick-out rights. That cascade is why landlords pursue anchors with injunctions and why anchor leases survive assignment scrutiny in due diligence.
Abstracting leases with go-dark clause terms?
Our specialists capture this clause — and every other one — with page citations and human QA sign-off. See Retail Lease Abstraction.
Get a quote — and a free sample round
Send one representative lease and we return the finished abstract, so you can judge the quality on your own documents before committing to anything.
