Sweetgreen signed a lease for 3101 Exposition Boulevard in Los Angeles on 23 May 2019. Section 31.5 tells the appraiser who breaks a tie over renewal rent what that appraiser may not do:
“The Final Arbiter shall select the Prevailing Rental Rate proposed by either Landlord or Tenant and shall not be entitled to choose any other Prevailing Rental Rate or to make a determination based upon the average of the Prevailing Rental Rates proposed by Landlord and Tenant."[1]
Atara Biotherapeutics signed an amendment with its South San Francisco landlord on 21 October 2020. Its arbitration subsection tells a three member panel exactly what Sweetgreen’s clause forbids:
“The average of the two closest Arbitrators in a three Arbitrator panel shall be final and binding upon the parties."[2]
Both documents are public. Both say “market.” They are describing two different games.
A renewal option that fixes the rent at fair market value is really two clauses stapled together. One says what the rent is, and almost nobody argues about it, because every version says roughly the same thing: comparable space, comparable term, relevant factors considered. The other says who decides when the parties disagree, and what that person is allowed to do with the two numbers in front of them. The second clause is where the money is, and it is the one that gets copied from the last deal without being read.
Five leases and amendments filed with the SEC answer it five different ways.
The sentence that forbids an average#
Sweetgreen’s Article 31 runs a long way before it reaches the appraiser. The landlord goes first: “Landlord shall determine the Prevailing Rental Rate by using its good faith judgment,” within fifteen days of the tenant’s extension notice. The tenant then has thirty days to accept, object, or walk away. If it objects, the parties negotiate. If they have not agreed by 120 days before the extension period begins, something unusual happens:
“then each party shall place in a separate sealed envelope their final proposal as to Prevailing Rental Rate and the Prevailing Rental Rate shall be determined by appraisal as provided below”
Sealed envelopes, then a hearing. The Final Arbiter asks for supplemental information, holds a hearing within thirty days, lets each side “explain and justify” its number, and writes a report within ten days. Then section 31.5 removes the one thing a tie breaker instinctively wants to do, which is to land somewhere in the middle.
That prohibition changes what each side writes on its paper. If the neutral can average, a landlord asking for $60 and a tenant offering $40 end up near $50, and a landlord asking for $75 against the same $40 ends up near $57. Padding pays. If the neutral must pick one number and cannot compromise, padding is how you lose: the extreme submission is the one the appraiser rejects, and the party who wrote a defensible number wins outright. Economists call this final offer arbitration, and in American practice it is usually called baseball arbitration, after the salary procedure in Major League Baseball. The point of it is to make both sides converge before anyone ever sees an appraiser, because the cost of being unreasonable is total.
So the sentence that looks like housekeeping is the sentence that sets the whole negotiation.
Three machines that all say “pick one,” and they are not the same machine#
Three of the five documents forbid a compromise number. They get there by different routes, and the route matters.
Acacia Communications leased space at 3 Clock Tower Place in Maynard, Massachusetts. Exhibit B to its Fifth Amendment, executed 1 June 2015, builds a three appraiser panel in which the third appraiser never forms a view of the rent at all:
“The Neutral Appraiser shall then choose either Landlord’s estimate of Prevailing Market Rent or Tenant’s estimate of Prevailing Market Rent as the Prevailing Market Rent of the space in question as of the commencement of the Renewal Term … For the avoidance of doubt, the Neutral Appraiser must choose either Landlord’s estimate of the Prevailing Market Rent or Tenant’s estimate of the Prevailing Market Rent, and the Neutral Appraiser shall have no authority to select any other amount as the Prevailing Market Rent."[3]
Nothing in Exhibit B asks the Neutral Appraiser to appraise anything. It is a selection, not a valuation, and no number other than the two estimates ever gets written down.
CarGurus leased Two Canal Park in Cambridge under a lease whose cover sheet reads “Execution Date: October 8, 2014.” Section 29.16(e)(ii) runs the opposite way:
“The arbitrators shall select whichever of Tenant’s or Landlord’s written designation of Fair Market Rental Value is nearest to the Fair Market Rental Value determined by the arbitrators and shall have no authority to select any other amount as the Fair Market Rental Value."[4]
Here the panel does find a number. It determines fair market rental value itself, and then rounds to whichever party was closest. The outcome is the same shape as Acacia’s, one of two numbers, but the record is different: there is now an arbitrators’ valuation sitting inside the proceeding, and the parties’ submissions are measured against it rather than against each other. A tenant whose own appraisal is strong wants that benchmark to exist. A tenant who is bluffing does not.
Sweetgreen’s Final Arbiter sits between the two. It holds a hearing and forms a view “based upon customary and usual appraisal techniques,” then must select one of the sealed proposals.
The practical difference shows up in what you spend money on. Under Acacia’s version, your appraiser’s report is an advocacy document aimed at one reader who will not produce a competing figure. Under CarGurus’ version, your submission has to survive comparison with a number three arbitrators reached on their own. The clauses are usually described in the same four words, baseball arbitration, and they do not price the same.
The sentence that requires an average, and the 182 filings behind it#
Atara’s amendment goes the other way, and it is not an outlier. MacroGenics has the same sentence, word for word, in the Fifth Amendment to its lease at 9704 Medical Center Drive in Rockville, Maryland, with the landlord ARE-Maryland No. 45, LLC:
“The decision of the Arbitrator(s) shall be made [***]. The decision of the single Arbitrator shall be final and binding upon the parties. The average of the two closest Arbitrators in a three Arbitrator panel shall be final and binding upon the parties."[5]
That sentence appears in 182 filings in the SEC full text index. It is not 182 negotiations. It is one landlord’s form propagating across a tenant base: Alexandria Real Estate entities and their life science tenants, among them BioLife Solutions, Neoleukin, Theriva, ImmunityBio, FibroGen, Fate Therapeutics, Corvus and Allakos.[6]
Read what the averaging rule actually does. Each side appoints an arbitrator; those two appoint a third. All three value the space. The two closest values are averaged and the third is discarded. No party’s submitted proposal is adopted. The Extension Proposal each side filed at the start is an opening position, not a bid, and the thing being averaged is two appraisals rather than two offers.
That is a defensible design. It throws out the arbitrator who was captured by whoever appointed them, which is a real problem in party appointed panels, and a ground rent arbitration we looked at in September shows what happens when nobody has designed for it. But it also means a party appointed arbitrator has a reason to go to an extreme: if your appraiser and the neutral land close together, your extreme is in the average, and if they do not, your extreme is discarded at no cost to you. The rule rewards exactly the behavior Sweetgreen’s clause is written to punish.
The same form, and the opposite answer to doing nothing#
The sharpest difference in this set has nothing to do with rent.
Atara’s clause and MacroGenics’ clause are the same form, in the same order, with the same defined terms. Both reach the same fork: the parties have negotiated in good faith and have not agreed on the market rate. Then they part company on what the tenant has to do about it.
Atara’s clause deems the step taken:
“Tenant shall be deemed to have elected arbitration as described in Section 5(b) .”
MacroGenics’ clause:
“If Tenant does not elect such arbitration, Tenant shall be deemed to have waived any right to extend the Term of the Lease and the Extension Right shall terminate.”
MacroGenics’ clause requires the tenant to act, by written notice, within a window, and then says what silence costs.
One tenant is carried into arbitration automatically. The other loses a five year extension right by missing a date. Same landlord family, same drafting, opposite consequence for doing nothing, and the difference is one sentence that a reader skimming for the rent formula would never stop on. The window MacroGenics has to hit is not in the public document either. Every date in section 6 is redacted.
All five documents punish silence somewhere, and MacroGenics is only the harshest. Atara, which carries the tenant into arbitration without being asked, still provides that “If either party fails to timely submit an Extension Proposal, the other party’s submitted proposal shall determine the Base Rent.” Acacia’s Exhibit B gives the tenant forty five days after the negotiation period to start the appraisal, and only the tenant may start it: “If Tenant does not timely request a Broker Determination, the Base Rent for the Renewal Term shall be the Landlord’s Rent Quotation.” CarGurus has thirty days from the landlord’s designation, “failing which, Tenant shall be conclusively deemed to have accepted Landlord’s designation of Fair Market Rental Value.” Sweetgreen’s rescission right is “deemed waived if not exercised within such thirty (30) day period.”
Acacia’s clause goes further and makes the failure to appoint an appraiser fatal. If one side does not name its appraiser after a ten day warning notice, “then the appraiser appointed by the other party shall be the sole appraiser whose choice of either Landlord’s or Tenant’s estimate of Prevailing Market Rent shall be binding and conclusive upon Tenant and Landlord.” The other side’s expert chooses between the two numbers, alone.
A renewal option is a calendar before it is a valuation, which is also the lesson of the option notice cases.
Who pays while the panel argues#
Appraisal takes months. Renewal terms start on a fixed date. So every one of these clauses has to answer a question that reads like plumbing and behaves like leverage: what does the tenant pay between the start of the extension term and the award?
CarGurus pays the landlord’s number:
“then Tenant shall pay Yearly Rent and other charges under the Lease in respect of the Premises in question based upon the Fair Market Rental Value designated by Landlord until either the agreement of the parties as to the Fair Market Rental Value, or the decision of the arbitrators, as the case may be, at which time Tenant shall pay any underpayment of rent and other charges to Landlord, or Landlord shall refund any overpayment”
Atara pays last year’s rent plus three percent:
“then Tenant shall pay Landlord Base Rent in an amount equal to the Base Rent in effect immediately prior to the Extension Term and increased by 3% until such determination is made”
MacroGenics has Atara’s sentence with the number removed: “increased by [***]% until such determination is made.”
Both versions true up afterwards, so neither is a windfall. What they allocate is the cost of time. Under the CarGurus rule, the landlord collects its own asking rent from day one of a dispute it may lose, and has no financial reason to hurry. Under the Atara rule, the landlord collects the old rent plus three percent in a rising market, and every month of delay costs it the gap. If you want to know which side will push for a quick hearing, read the interim rent sentence and not the arbitration procedure.
The direction of a true up also depends on being able to compute it, which means the clause has to survive contact with the rest of the lease. Sweetgreen’s definition of Prevailing Rental Rate quietly handles one trap: it looks at rates for comparable buildings in the Crenshaw and West Adams submarket “where such rates were not set by the terms of such leases,” which excludes other tenants’ option rents from the comparable set. Without those twelve words, a market determination can end up measuring a market made of other formulas.
Fair market, with a floor, with a discount, and never with a cap#
“Fair market” suggests a number that can move either way. In this set it rarely can.
Acacia’s original lease, dated 27 October 2009, put the floor in the same sentence as the standard:
“Said extension shall be at the then fair market rate, for first class office space in the Maynard, Concord, Acton, Boxborough area; however, in no event shall such rate be less than the Base Rent Year Three (as defined below).”
MacroGenics writes the floor as a multiple of the expiring rent, with the multiple redacted:
“Base Rent at the commencement of the applicable Extension Term shall equal the greater of (i) the Market Rate (as defined below), and (ii) the Base Rent payable immediately before the commencement of the applicable Extension Term multiplied by [***]%.”
Sweetgreen runs the mirror image and gets a discount rather than a floor: base rent per rentable square foot is “ninety percent (90%) of the then Prevailing Rental Rate” in the first extension period and “ninety-five percent (95%)” in the second. That is a standing five to ten percent discount to market, written into the option at signing. It is a priced concession rather than a drafting accident, and it is the only term in this set that runs in the tenant’s favor by construction.
No lease in this set caps the increase. Floors are ordinary and ceilings are absent, which tells you which side writes the first draft of a renewal option.
The clause that nobody writes#
There is a question every FMV renewal raises and none of these five documents answers. The tenant paid for its own build out, or amortized it through base rent. At renewal, the space is appraised as improved space. Does the appraiser value the tenant’s own money as part of the market rent it now has to pay?
The drafting a practitioner would expect is simply absent from the public record. On the SEC full text index, “without regard to the Tenant Improvements” returns zero filings. “disregarding any Tenant Improvements” returns zero. “without regard to any improvements installed by Tenant” returns zero. “shall not take into account any improvements made by Tenant” returns zero.[6]
What the leases do instead is handle concessions, which is a different problem wearing the same coat. MacroGenics’ Market Rate definition requires the appraiser to take “into account the existence and amount of any tenant improvement allowance or any other cash payment or other equivalent concession,” which adjusts the comparables for what other tenants received and says nothing about what this tenant installed. Sweetgreen’s definition says rates “shall take into consideration all relevant factors” and stops there. Acacia’s Prevailing Market Rent is defined in one line as “the anticipated rent for the Premises as of the commencement of the Renewal Term under market conditions then existing and taking into account all relevant factors,” which hands the whole question to the appraiser.
If the standard is silent, the appraiser decides, and the appraiser is being asked to value the premises rather than to apportion who paid for them. Tenants who fund a large build out, and who have the allowance disbursement conditions to prove it, are the ones with the most to lose from a definition that says “all relevant factors” and leaves it there.
What one clause looked like over six years#
Acacia’s documents are the best record in this set of how a renewal clause actually gets written, because the same relationship produced three versions.
2009, Section 7 of the original lease. One sentence, a twelve month notice requirement, a geographic market described by naming four towns, a floor at year three rent, and no procedure at all for a disagreement.
2012, Section 15 of the Third Amendment, dated 21 November 2012. Shorter:
“15. Renewal Option. Provided that Tenant is not in default of the Lease, Tenant shall have the right to renew the term of the Lease for One (1) additional Two (2) year period, with no less than twelve (12) months prior written notice. The rent for such renewal option period shall be the “market” rent for such space at the time of commencement of the renewal option term.”
The word market is in quotation marks in the document. There is no definition, no comparable set, no floor, no appraisal, and no tie breaker. Two parties agreed to agree, on the rent for a two year term, with twelve months’ notice.
2015, the Fifth Amendment, by which point Acacia occupied 41,403 square feet and was heading for an IPO. Section 1.b removes the original option expressly, “notwithstanding any provision of the Existing Lease to the contrary (including without limitation Section 7 of the Original Lease),” and sends the market rent determination to Exhibit B. Exhibit B is about a thousand words: a Landlord’s Rent Quotation with a delivery deadline, a thirty day negotiation period, a forty five day window for the tenant to start the appraisal, three appraisers with ten years of experience each, deadlines for appointing them, cost allocation, a sixty day deadline for the decision, the no averaging sentence, the sole appraiser penalty, and “All times set forth in this Exhibit B are of the essence.”
The floor did not come back. The parties traded a one line protection against a falling market for a procedure that resolves a dispute in a rising one, and in Maynard in 2015, with a tenant about to go public and a new institutional landlord, that was probably the right trade for both of them. The point is that it was a trade. Most renewal clauses do not show their work this way, and the version in your lease is one of these three drafting generations, chosen by whoever had the last form.
Does your renewal option tell the neutral what to do with the two numbers?#
The terms that decide what a fair market renewal costs are not the definition of fair market. They are: who delivers the first number and by when; how long the other side has to object, and what happens to the right if it does not; whether the tie breaker may average, must pick one submission, or must find its own number and then round; whether the tie breaker is picking between the parties’ proposals or between their appraisers’; what the tenant pays between the start of the extension term and the award, and whether that is the landlord’s ask or last year’s rent plus a percentage; whether the exercise can be withdrawn after the number arrives, and what that withdrawal costs; whether there is a floor, a discount, or a cap; and whether the standard says anything about the tenant’s own improvements.
Acrebase pulls those terms out of the document and lines them up across a portfolio, so a clause whose neutral “shall have no authority to select any other amount” and one whose panel averages the two closest sit next to each other instead of in two leases nobody compares. The clause library holds the version your counsel approved, with fallback positions in the order you actually trade them, and the AI drafts and redlines against it, so the difference between “Tenant shall be deemed to have elected arbitration” and “the Extension Right shall terminate” is a standard you apply on every deal rather than a catch that depended on who was reading that afternoon. If the way you would learn what your own renewal procedure says is by missing a deadline in it, that is the problem.
If you are a landlord, pick a tie breaking rule and mean it. The averaging form is defensible and it is what a major life science landlord’s form uses, but understand that it invites a padded submission from the other side’s appraiser and it will not make anyone converge before the hearing. If you want convergence, use the Sweetgreen or Acacia form and accept that your own ask has to be defensible, because an unreasonable number loses outright. Keep the interim rent at your designation with a true up, as CarGurus’ landlord did, since that is the single most valuable sentence in the clause and the one tenants rarely price. Keep the floor. What you should expect to give up is the asymmetry on silence: a tenant that forgets to demand arbitration should not lose a five year extension right, and a tribunal looking at that result will strain to avoid it.
If you are a tenant, read the clause in this order. First, find every deadline and whose job each one is, then put them in a calendar, because in four of these five documents missing a date hands the landlord its own number or kills the option. Second, read the tie breaker sentence and work out whether padding helps you or hurts you, and brief your appraiser accordingly. Third, read the interim rent sentence; if it says you pay the landlord’s designation, you are funding the dispute, and the fix is last year’s rent plus a stated percentage with a true up. Fourth, ask for a rescission right. Sweetgreen has one, thirty days from the landlord’s number, at the price of its remaining options, and Atara’s amendment says flatly that “Tenant shall have no right thereafter to rescind or elect not to extend the term of the Lease for the Extension Term.” Being bound to a renewal at an unknown rent is a real exposure, and it is cheapest to fix on the day you sign. Fifth, if you are funding a significant build out, put the improvements question in the standard, because “all relevant factors” will not answer it in your favor.
Footnotes
[1] Lease between WELCOME TO THE DAIRY, LLC, a Delaware limited liability company, as Landlord, and SWEETGREEN, INC., a Delaware corporation, as Tenant, for premises at 3101 Exposition Boulevard, Los Angeles, California. The cover page reads “Dated May 23, 2019.” Filed as Exhibit 10.13 to Sweetgreen’s Form S-1, accession 0001193125-21-306603, roughly two and a half years after the lease date: https://www.sec.gov/Archives/edgar/data/1477815/000119312521306603/d104360dex1013.htm
Article 31 grants two five year extension options, exercisable not earlier than twelve and not later than nine months before the extension period starts, void at the landlord’s election if a default is continuing or if more than thirty percent of the premises is sublet other than to Permitted Transferees. Section 31.2 defines Prevailing Rental Rate as an average per rentable square foot rate for new and renewal leases for similar uses and terms in comparable class “A” creative office buildings in the Crenshaw/West Adams submarket over the preceding six months, excluding rates “not set by the terms of such leases.” Sections 31.3 to 31.5 carry the landlord’s good faith determination, the thirty day acceptance, objection or rescission window, the sealed envelope step at 120 days, the appraiser selection ladder, the hearing, and the no averaging sentence quoted in the body. The same lease applies a pick one rule to rentable area as well: if the tenant’s architect disputes the landlord’s BOMA measurement report, a third architect “may only choose one of the two reports,” which is the mechanic discussed in the remeasurement post.
[2] First Amendment to Lease between 611 GATEWAY CENTER LP, a Delaware limited partnership, as Landlord, and ATARA BIOTHERAPEUTICS, INC., a Delaware corporation, as Tenant, “made as of October 21, 2020,” amending an Office Lease dated as of 25 November 2015 for Suite 900, approximately 13,670 rentable square feet, at 611 Gateway Boulevard, South San Francisco, California. Filed as Exhibit 10.4 to Atara’s Form 10-Q, accession 0001564590-20-052503: https://www.sec.gov/Archives/edgar/data/1604464/000156459020052503/atra-ex104_206.htm
Section 5 of the amendment grants the extension right and the arbitration procedure quoted in the body. An “Arbitrator” must be a member of the American Institute of Real Estate Appraisers with at least ten years of appraisal experience in the greater South San Francisco metropolitan area, or a licensed commercial broker with at least fifteen years of leasing experience. The asymmetric default on a missed proposal, “If either party fails to timely submit an Extension Proposal, the other party’s submitted proposal shall determine the Base Rent,” applies to both sides, and the equivalent sentence appears in MacroGenics’ amendment at footnote 5. The landlord entity is 611 Gateway Center LP; the building is 611 Gateway Boulevard.
[3] Commercial Lease between WELLESLEY/ROSEWOOD MAYNARD MILLS LIMITED PARTNERSHIP and ACACIA COMMUNICATIONS, INC., dated 27 October 2009, for 9,730 rentable square feet at Suite 210, 3 Clock Tower Place, Maynard, Massachusetts, together with the Third Amendment dated 21 November 2012 and the Fifth Amendment “executed this 1 st day of June, 2015 and for all purposes under the Lease … is deemed effective as of January 1, 2015,” by which point the landlord was AS CLOCK TOWER OWNER, LLC and the tenant occupied 41,403 rentable square feet. All are in one exhibit, filed as Exhibit 10.13 to Acacia’s Form S-1, accession 0001193125-15-409344: https://www.sec.gov/Archives/edgar/data/1651235/000119312515409344/d46988dex1013.htm
Exhibit B to the Fifth Amendment is the appraisal procedure. The renewal is self executing once the appraisal is started: on the earlier of agreement during the negotiation period or “the timely initiation of a Broker Determination by Tenant,” the lease “shall automatically be deemed extended for the Renewal Term, without the necessity for the execution of any additional documents,” subject only to a written instrument confirming the base rent. Exercise is void “in Landlord’s sole discretion, if an Event of Default is ongoing” at the exercise notice or at the start of the extension term. Section 15 of the Third Amendment, quoted in full in the body, is the operative option after 2012; the Fifth Amendment leaves that section in place and replaces only its rent determination, so the two year renewal term and the twelve month notice requirement still come from the 2012 document. The text renders the defined term once as “Landlords Rent Quotation” without the apostrophe and once with it; the body quotes the version with it. Base rent figures in the original lease are stated per rentable square foot with annual and monthly equivalents, and I have not reproduced them because the floor is expressed as the year three rent rather than as a number. The exhibit also contains a Sixth Amendment of the same date, which does not touch the renewal procedure.
[4] Lease between BCSP CAMBRIDGE TWO PROPERTY LLC, a Delaware limited liability company, and CARGURUS LLC, a Massachusetts limited liability company, for Two Canal Park, Cambridge, Massachusetts. Exhibit 1 of the lease data sheet reads “Execution Date: October 8, 2014.” Filed as Exhibit 10.8 to CarGurus’ Form S-1, accession 0001047469-17-005904, three years after execution: https://www.sec.gov/Archives/edgar/data/1494259/000104746917005904/a2233230zex-10_8.htm
Section 29.16 conditions the single five year extension option on no uncured default and on the tenant or a Permitted Assignee occupying at least seventy five percent of the premises, both at exercise and at the start of the extension term. The landlord moves first: “Landlord shall initially designate Fair Market Rental Value by notice to Tenant thereof given at least eleven (11) months before the Expiration Date.” Fair Market Rental Value is defined by reference to renewal leases then being executed for comparable space in the building, falling back to comparable first class office buildings in the East Cambridge market. The two party appointed arbitrators can decide unanimously without a third, and a third is selected through the Boston Bar Association if they cannot; “Landlord and Tenant shall bear the expense of the third arbitrator (if any) equally.” Section 29.16(d) has words missing as filed, reading “except that, if has not yet been determined, the Yearly Rent payable in respect of the Extension Term may not be set forth in said amendment.” I refetched the exhibit from the Archives URL to rule out a conversion artifact; the gap is in the record as filed.
[5] Fifth Amendment to Lease between ARE-MARYLAND NO. 45, LLC, a Delaware limited liability company, and MACROGENICS, INC., a Delaware corporation, for 9704 Medical Center Drive, Rockville, Maryland. The document’s own execution date is redacted: it is “entered into as of this [], [] (” Execution Date “).” Filed as Exhibit 10.30 to MacroGenics’ Form 10-K, accession 0001125345-23-000059, on 15 March 2023: https://www.sec.gov/Archives/edgar/data/1125345/000112534523000059/a1030_fifthamendmenttohqle.htm
The face of the exhibit carries the Item 601(b)(10) legend excluding portions that are “both not material and are the type that the Company treats as private and confidential,” which the document sets in capitals. Section 6 grants two consecutive five year extension rights on twelve to eighteen months’ notice and opens by deleting the previous regime: “Section 14 of the Second Amendment is hereby deleted in its entirely and replaced with the words ’ Intentionally Deleted. ‘” Single quotation marks there stand for the filing’s double marks, and the spacing inside them is as filed. The typo “entirely” for “entirety” is in the document. Every date in the extension provision is redacted, including both extension term commencement and expiration dates, the arbitrator appointment deadlines, the decision deadline, the floor multiplier and the interim escalation percentage. The mechanism is public and the numbers that decide who wins are not. The Market Rate definition points to the Rockville, Maryland submarket.
[6] On sources and method. The clause text was located through SEC EDGAR full text search at efts.sec.gov, which searches filings from 2001 onward, and every quotation here was checked against the stripped text of the filing itself rather than against a search snippet or a summary. The generic defined terms are too common to triage: “Fair Market Rental Value” returns 6,548 Form 10-K filings and “Fair Market Rent” 7,732. The remedy phrasings are narrow and are what find this clause family. “shall have no authority to select any other” returns seven filings, “shall not select any other amount” twenty one, most of them timberland supply agreements rather than leases. “The average of the two closest Arbitrators in a three Arbitrator panel” returns 182, which is the Alexandria form described in the body; the tenant names listed there were read off the hit list and I have not pulled each of those 182 filings. “rescind its exercise of the Extension Option” returns four and “withdraw its exercise of the Extension Option” fifty nine, so an express exit after the number arrives is the rare feature rather than the norm. The four tenant improvement phrasings in the body return zero filings each; “without regard to any Tenant Improvements” returns two, both of which are the same tenant’s base building code compliance representation rather than a rent standard.
Two limits worth stating. These five documents were chosen because they carry the same clause family and disagree in instructive ways, not as a sample of the market, and all five are leases filed because they were material to a public company, which skews toward venture backed and recently public tenants in Boston, San Francisco and Los Angeles. And a survey of law firm client alerts and practice group posts on fair market renewal determination, appraisal procedures and final offer arbitration for option rent published between August and October 2026 found nothing dated in that window; what the firms are writing about in the same corner of the lease is evergreen and auto extension language in letters of credit. That is what I could not find in the sources reachable here, not a claim that nothing exists. I also looked for a reported decision construing an instruction to a neutral not to average, and found none I could verify; the question of what a court does when a panel averages anyway, in a clause that forbids it, appears to be open.
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