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The CRE Almanac

Recapture Clause

Published 2026-08-11

A recapture clause gives a landlord the right to take back a tenant's space — terminating the lease as to that space — when a specified trigger occurs, most commonly the tenant's request to assign or sublet. Instead of consenting to the transfer or refusing it, the landlord can simply reclaim the premises and re-let them directly.

Why landlords want it

A transfer request is a signal: the tenant no longer needs the space at the rent it is paying. If market rents have risen, the landlord would rather capture that upside itself than watch the tenant collect it as sublease profit. Recapture also protects control of the rent roll and, in retail, the tenant mix — the landlord decides who occupies the space rather than inheriting whoever the tenant found. In some retail leases the trigger is not a transfer request at all but a cessation of operations or a sustained sales shortfall, making recapture a cousin of the landlord-side kick-out.

How the drafting varies

  • Scope — recapture may apply to the whole premises or only to the portion proposed for sublease, and partial recapture raises the question of who pays to demise the space.
  • Rescission rights — well-advised tenants negotiate the right to withdraw the transfer request once the landlord elects to recapture, keeping the space instead of losing it.
  • Carve-outs — permitted transfers to affiliates or in connection with a merger or sale of the business usually do not trigger recapture at all.
  • Timing — the landlord's election window, and how long the tenant must wait before closing the transfer, differ lease to lease.

The practical stakes are asymmetric. For a tenant, a broad recapture right can turn a routine rightsizing plan into a forced exit; for a subtenant, it means the deal can evaporate after terms are agreed. Reading the trigger language precisely — what counts as a request, and when the election period starts — is where disputes tend to begin.

In your documents

Whether a landlord can recapture, on what triggers, and with what tenant protections is answered differently in nearly every lease — and often modified again by amendment. When a transfer request lands, the operative language matters more than the abstract: lease analysis with source-linked answers lets you pull the recapture and transfer provisions across the portfolio and read exactly what each lease says.