Commercial real estate
How to structure revenue-sharing agreements with tenants for co-branded amenities and services in mixed-use commercial developments.
This guide explains practical frameworks for crafting revenue-sharing agreements with tenants involved in co-branded amenities and services within mixed-use developments, balancing incentives, risk, and long-term value while preserving brand integrity and operational clarity.
Published by
Andrew Allen
August 08, 2025 - 3 min Read
In mixed-use developments that blend retail, office, hospitality, and residential space, co-branded amenities—such as fitness centers, cafes, lounges, or media studios—offer opportunities to drive foot traffic and create distinctive experiences. A well-structured revenue-sharing agreement aligns the landlord’s investment with the tenant’s performance, ensuring mutual benefit without creating asymmetric risk. The starting point is a clear definition of which amenities are eligible, who contributes capital, and how usage will be measured. Transparency around cost allocations, maintenance responsibilities, and service levels helps prevent disputes later. Early-stage governance should specify decision rights for branding, marketing campaigns, and capital upgrades to maintain consistency across the property portfolio.
A robust framework begins with a baseline revenue model that forecasts potential inflows from co-branded services, adjusted for seasonal fluctuations and operating hours. Landlords and tenants should determine who retains control over pricing, promotions, and discounting while preserving contractually agreed margins. The contract can designate a shared revenue pool where profits flow after recovering operating expenses and a pre-agreed reserve. It’s essential to define the accounting method—accrual versus cash accounting—and provide regular, independently audited statements. Establishing a clear wind-down or exit protocol also matters, so either party can disengage from the collaboration with minimal disruption to ongoing operations.
Aligning brand strategy with clear financial metrics and governance.
When designing the revenue-sharing terms, it is crucial to tie percentages to measurable outcomes such as foot traffic, dwell time, or incremental sales attributed to the co-branded amenity. A tiered structure can reward higher performance without penalizing baseline operation, ensuring tenants are motivated to invest in guest experience and service quality. Additionally, consider introducing performance covenants that require consistent service levels, brand standards, and safety compliance. These covenants protect the landlord’s property value while giving tenants the flexibility to innovate within approved boundaries. Regular performance reviews help adjust terms in response to market shifts, ensuring the agreement remains fair and sustainable.
Beyond financial mechanics, the operational framework should delineate responsibilities for marketing, data sharing, and customer privacy. Co-branding agreements typically involve joint promotional campaigns, data analytics about consumer behavior, and shared loyalty programs. To avoid disputes, specify who owns customer data, how insights may be used, and the duration of data retention. A clear service level agreement for amenities—maintenance response times, cleaning frequencies, and equipment lifecycles—reduces friction. Finally, carve out protections for brand integrity, including guidelines on third-party vendors, permissible subcontractors, and contingency plans for downtime or outages that could affect the guest experience.
Clarity on risk, responsibilities, and measurement is essential.
A successful model also requires thoughtful governance that supports long-term collaboration rather than short-term gains. Create a joint steering committee with equal representation from landlords and tenants to oversee branding decisions, investment authorizations, and major renovations. Decisions should be documented with time-bound triggers and escalation paths for unresolved issues. In addition, implement a transparent capital plan that outlines every major expenditure related to the co-branded amenities, including timelines, cost caps, and depreciation methods. This approach helps both parties anticipate capital needs, schedule updates, and manage cash flow without compromising day-to-day operations.
Risk allocation is a critical element of any revenue-sharing construct. The agreement should specify who bears liability for safety incidents, warranty claims, or service interruptions connected to the co-branded amenities. Consider including force majeure clauses, indemnifications, and insurance requirements that align with industry standards. A well-defined risk matrix can guide contingency budgeting, ensuring that a single failure does not derail the entire program. By distributing risk thoughtfully, both sides gain confidence to invest in high-quality experiences that attract tenants, visitors, and long-term tenants.
Brand standards and performance-based incentives guide growth.
Tenant-specific incentives can be calibrated to reflect their role in activating the amenity ecosystem. For example, a flagship tenant may receive a larger share of incremental revenue in exchange for longer-term commitment and higher exposure, while smaller tenants could benefit from scaled rebates tied to utilization milestones. The contract should prevent stagnation by allowing periodic renegotiation at defined milestones or after substantial market shifts. It is also wise to embed a sunset clause that gradually reduces revenue-sharing percentages if performance plateaus or if market norms evolve, ensuring the partnership remains viable over time.
Clear documentation of branding guidelines protects the asset’s value while enabling creative collaboration. Co-branding requires consistent logos, color schemes, and messaging across digital channels, signage, and on-site experiences. The agreement should describe approval processes for new branding initiatives, inventory of approved collateral, and limits on commercialization that could dilute the brand. By codifying these standards, landlords safeguard the prestige of the development and tenants gain predictable visibility. At the same time, incentives can be tied to successful launches of new co-branded programs, reinforcing continuous improvement and shared ownership of the customer journey.
Capital strategy, governance, and data governance sustain the program.
Data governance is another essential pillar. Shared analytics can reveal which aspects of the co-branded amenities drive incremental traffic and higher average spend. The contract should specify data ownership, access rights, and usage limits to protect customer privacy and comply with applicable regulations. Consider appointing an independent data auditor to verify insights and ensure that attribution models are fair. When data is used for marketing, opt-in consent requirements and disclosure practices should be clear to customers. Transparent reporting builds trust with tenants while giving landlords the analytics they need to optimize space utilization and drive value.
Financing arrangements for co-branded amenities should balance capital exposure with projected returns. Consider layered funding structures, such as a base capital contribution from the landlord complemented by tenant equity or performance-based reimbursements. Outline how capital is sourced, reimbursed, and amortized, including timelines and interest considerations if applicable. A well-designed financing plan aligns cash flows with the life cycle of the amenity, preventing funding gaps during renovation or expansion phases. In addition, include exit strategies for financiers that may seek to reprice risk or exit if performance thresholds are not met within agreed windows.
Another key area is tenant compatibility and space planning. A successful revenue-sharing model hinges on selecting tenants whose brand values align with the co-branded concept and whose spaces naturally complement the amenity. The agreement should address how co-branding elements influence leasing strategies, space allocation, and renewals, ensuring that occupancy density does not undermine service quality. Consider scheduling, access control, and privacy controls to safeguard both tenant operations and guest experiences. Proper space planning reduces conflicts, maximizes exposure, and strengthens the overall value proposition of the mixed-use project.
Finally, clear termination options protect both parties if the collaboration falters. Termination provisions should specify notice periods, buyout provisions, and transitional support to maintain guest experience during wind-down. A well-crafted exit plan minimizes disruption to other tenants and existing operations, preserving goodwill and preserving property valuation. Include residual obligations for ongoing maintenance, data handling, and brand usage post-termination to prevent disputes. By treating termination as a carefully managed process, landlords and tenants can part ways with dignity and preserve the option to re-enter a future, better-aligned collaboration.
