A tenant intending to occupy the building is unlikely to be in the market to take space, once it signs the lease. The fact that the owner cannot lease the space again is a red herring from a competition perspective - the key is that the space could be resold by the tenant, or by the owner if the owner buys back the right to do so. The term reflects the outcome of the competitive process, rather than being a barrier to it. If supply of the relevant goods or services is more restricted, with market power concentrated in the hands of a few suppliers, the position will be more complex. We consider that market power is the key to thinking about long term arrangements of this kind.
Market power is, after all, the antithesis of competition.
If the contract takes one or more players out of the game for its duration the courts or the Commerce Commission may see it as significant to the process of competition. Yet this will not always be so. For example, if the owner of an unique facility such as an electricity distribution network sells all the network capacity to a third party reseller, there is no reduction in competition. Any market power associated with the facility has passed from one person to another, but nothing in the contract increases that market power. Or suppose an oil company owns a service station at which it sells only its own petrol.