As shopping centers continue to redevelop vacant anchor spaces, co-tenancy provisions are increasingly at the center of landlord-tenant disputes. A recent Virginia federal court joined a growing number of courts throughout the country in rejecting a landlord’s creative argument to reinterpret the meaning of a co-tenancy provision while ruling in favor of the tenant.
In River Ridge Mall JV, LLC v. Dick’s Sporting Goods, Inc., No. 6:25-cv-00018 (W.D. Va. Nov. 6, 2025), Dick’s Sporting Goods (“DSG”) leased a 45,000-square-foot retail location in a newly developed area of River Ridge Mall in Lynchburg, Virginia. The lease included a Deferred Co-Tenancy Requirement expressly obligating River Ridge to secure two qualifying national or regional co-tenants — one occupying “at least” 16,000 square feet and another occupying “at least” 25,000 square feet. Until that requirement was met, DSG was entitled to pay “Substitute Rent” of 2% of gross sales rather than “Minimum Rent” of $540,000 per year. DSG’s lease included a Lease Plan that listed the co-tenancy areas as “+/- 16,000” and “+/- 25,000” square feet.
River Ridge secured Home Goods and Ulta to satisfy the requirement. In finalizing its construction plans, however, River Ridge modified its Lease Plan to accommodate several design requests from both tenants and to add a third, smaller co-tenant, a regional clothing boutique. The cumulative effect reduced Ulta’s leasable floor area from 16,000 square feet to 10,067 square feet, which was nearly 40% below the contractual minimum required by DSG’s lease. In August 2020, River Ridge sent DSG a Notice of Delivery advising DSG of the revised Lease Plan and giving DSG an opportunity to object. DSG raised no objections and approved the final plan by December 2020.
The trouble for River Ridge began in March 2022, when its own representative emailed DSG about the reduced footprint, inquiring whether there was “any discussion on incentive to allow [DSG] to waive or modify that provision.” No waiver or modification was ever negotiated. Nevertheless, in late October 2023 — after Home Goods had opened but before Ulta had — River Ridge notified DSG that the co-tenancy requirement had been satisfied and demanded Minimum Rent beginning on Ulta’s future opening date. DSG formally responded in January 2024, citing those prior communications as evidence that River Ridge itself knew the reduced footprint fell short. Ulta opened in July 2024, DSG continued paying Substitute Rent, and River Ridge filed suit, arguing that the “+/-” notation in the Lease Plan made the square footage obligations intentionally flexible and negated the language in the lease that required that each co-tenant occupy “at least” the applicable square footage listed.
The court granted DSG’s motion to dismiss, stating that the co-tenancy clause required a tenant occupying at least 16,000 square feet, and a 10,067-square-foot tenancy plainly did not satisfy it. On the “+/-” argument, the court found that plus-or-minus symbols in real estate descriptions convey a “slight or unimportant inaccuracy” arising during construction and “have no legal value in determining boundaries.” According to the court, the lease was unambiguous, River Ridge had failed to state a viable claim, and the complaint was dismissed with prejudice.
Co-tenancy clauses continue to be a major source of contention between landlords and tenants as the market continues to shift away from anchor tenants. Landlords and tenants should take great care in negotiating these often lengthy and nuanced provisions to avoid costly disputes and unintended outcomes.