Can anyone give me some tips before going to look at a lease?

[StefanR]

Hi!

I will be going soon to take a look at a place I am looking to lease for a Coffee shop.

I never leased a commercial spot before so I would be grateful to hear any tips, like terms and condition, what should I be aware of,
who should pay for improvements, plumbing, electric, I think this location may not have central air, should I asked them to install one?
Just anything you know that I should be aware of.

Also, let me know what you think about details I already have about the place:
They are asking $6000 NNN, 900sqft, it has a basement same size, corner store, if you google map
Caffeination, Chestnut Street, Philadelphia you will be able to see pictures and the shop.

It has all the equipment from the last coffee shop which I do not want to use, I would bring my own and build my own counter.
Rent was for the place as is, should I and how much lower it since I do not want the stuff? Agent said I can send in the offer.

Basically lets just talk if you feel like. Thanks.

Stefan

 

[John P]

Stefan,

This is the best answer I can give you. I'm not affiliated with Dale, but he is the best out there.

Lease Coach | America's Number One Authority on Lease Negotiating for Tenants

Scour what Dale has written and posted. If you need him, get him.
He knows his sh!t.

 

[efriese]

Leasing is a shell game usually. You can ask for Tenant Improvement Allowance (TIA) where the landlord will pay/reimburse you for improvements to the space. You can ask for anything. Not paying rent for a few months, installing an AC, etc. The landlord will probably want to tack the cost on to the end of the lease. It is worth it to hire an attorney to review the lease. When we rented our space the attorney found a number of places in the lease that were grossly in favor of the landlord.

 

[StefanR]

Leasing is a shell game usually. You can ask for Tenant Improvement Allowance (TIA) where the landlord will pay/reimburse you for improvements to the space. You can ask for anything. Not paying rent for a few months, installing an AC, etc. The landlord will probably want to tack the cost on to the end of the lease. It is worth it to hire an attorney to review the lease. When we rented our space the attorney found a number of places in the lease that were grossly in favor of the landlord.

Hi, thanks for the info.

Let me ask you, what kind of improvements landlord generally would accept paying? One thing bad about that location i am looking at is AC\heat. It needs to be replaced and the guy told me agency would probably give me a month free because of that.

How many months is usual to have free for the build up, by your experience? Lastly, I was planing taking the lease to realtor agent of my choice, and have them look at it before I sign.

What is your personal experience and what do you wish you knew when you took the place that you didn't know then?

Thanks for your input.

 

[Musicphan]

Please do yourself a favor and take up John P's suggestion... Dale from the Leasing Coach seems to be a solid guy and reading the book will give you a much better picture of commercial leasing and the ins/outs/who pays for what, .

 

[efriese]

Hi, thanks for the info.

Let me ask you, what kind of improvements landlord generally would accept paying? One thing bad about that location i am looking at is AC\heat. It needs to be replaced and the guy told me agency would probably give me a month free because of that.

How many months is usual to have free for the build up, by your experience? Lastly, I was planing taking the lease to realtor agent of my choice, and have them look at it before I sign.

What is your personal experience and what do you wish you knew when you took the place that you didn't know then?

Thanks for your input.

It really depends on the landlord. For tax reasons TIA has to be used on attached improvements (ie electrical, HVAC, building walls, etc). It can’t be used on equipment or something you want to own. We asked for 6 months no rent and 10k in TIA. It took a us 3 months to get the doors open, but that really depends on the space and what you’re wanting to do with it. Our space was previously a food establishment so we started ahead of the game.

This is just my opinion but I wouldn’t lease a space without AC. Coffee equipment puts off heat so I would be concerned about the heat in the summer. Having a realtor look at the lease is good, but I would track down a real estate attorney and have them review the lease. You’ve got to sell around $8000 in coffee just to cover the rent. It’s worth it to spend some money up front to get the lease right.

 

[StefanR]

It really depends on the landlord. For tax reasons TIA has to be used on attached improvements (ie electrical, HVAC, building walls, etc). It can’t be used on equipment or something you want to own. We asked for 6 months no rent and 10k in TIA. It took a us 3 months to get the doors open, but that really depends on the space and what you’re wanting to do with it. Our space was previously a food establishment so we started ahead of the game.

This is just my opinion but I wouldn’t lease a space without AC. Coffee equipment puts off heat so I would be concerned about the heat in the summer. Having a realtor look at the lease is good, but I would track down a real estate attorney and have them review the lease. You’ve got to sell around $8000 in coffee just to cover the rent. It’s worth it to spend some money up front to get the lease right.

Wow, thats a lot of free rent time and TIA. May I ask, what made you ask for that much, especially since it was already a food place prior? Also, did they gave you 10k to work with, or it was off the rent on top of the free rent time? And did the landlord "hook up" that TIA back into the lease, as a rent increase?

Thanks again.

 

[Miracle]

In commercial real estate, a lease may be either a short term or long term leases. The two types of leases serve the needs of two very different market segments. A short term lease is one that expires within a year or two and establishes month-to-month terms after its expiration date. Short-term leases can be ideal for new businesses or for those looking for short-term use of space, but there are some important considerations to keep in mind before signing.