Want to build a 150K sqft commercial space, how do I find a tenant before construction?
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[{"id": "if35n7z", "text": "One thing you really need to pay attention to is the big box exclusive use clauses. If you plan on building 150k and putting a Walmart in it, youre going to want to read their lease very closely. It will likely prevent you from allowing 90% of the businesses you may be used to having as tenants. \n\nThis also applies with nonprofit organizations and church's. They can often really hurt a centers potential income due to the exclusives in the lease.", "replies": [], "depth": 1}, {"id": "if35yzt", "text": "Procure a market study.", "replies": [], "depth": 1}, {"id": "if3bunn", "text": "Talk to retail brokers. They typically have \"the\" relationship with certain tenants in a given geographic area. As someone else mentioned, work with a lawyer on the leasing for the project. Your anchor tenant will be negotiating very strict terms and will be getting the best deal, so you'll want to make sure their terms are consistent with the market and don't impede your ability to get other quality tenants. That being said, they want you to have good quality tenants because high traffic = sales, so remember there's a balance here.", "replies": [], "depth": 1}, {"id": "if3hges", "text": "Be extremely careful when you get into bed with a lion. I was taught by a dear friend about how Ikea really will just bulldoze you into doing what they want. Just read everything in the agreements", "replies": [{"id": "if3t2zl", "text": "Amazing. Ikea was screwing me for years on an industrial space of roughly 170k sq.ft. / 350k sq.ft. Building. They kept forcing us into 6 month leases. This went on for more than a decade. \n\nFinally a couple of years ago when the market picked up, we did not renew. At the same time an LP that had gotten contentious wanted out of the property. We bought them based on 50% occupancy. Following month we put a triple A tenant in the space for 5 years at prevailing market rates. God I love industrial", "replies": [], "depth": 2}], "depth": 1}, {"id": "if3lvmh", "text": "Dm me i can provide some market info and possibly numbers to reach walmart or target", "replies": [], "depth": 1}, {"id": "if3u1xl", "text": "Hire an experienced SIOR broker in that market. SIOR.com", "replies": [], "depth": 1}, {"id": "if4jlx4", "text": "Put together renderings and site plans and market it for a build to suit", "replies": [], "depth": 1}, {"id": "if4yn7s", "text": "Not to be a Debbie downer, but it sounds like you have at most $6m in equity for what is likely a $50m deal. Senior lenders will tap out around 75% LTC with pref hardly making it to 85% right now. And there\u2019s no shot anyone is financing a retail construction deal without a large majority of it preleased. \n\n150k is a lot of space to lease out, with even big tenants like a grocer taking 40-50k. You may be looking at 7-10 tenants here. They\u2019re only going to be interested if this is a very prime location for them- I would talk to a retail broker to get their advice on how desirable a location is for that. \n\nMy advice would be to first talk to that broker and make sure it\u2019ll work. Then tie up the land for as little as possible, get the broker working on LOIs, and find some more equity. Once you have signed LOIs in hand, go find some debt and get the deal going", "replies": [], "depth": 1}, {"id": "if4yu78", "text": "Also know, big boxes don\u2019t pay market rate.\n\nIs your land in a major metro market or suburbs? \n\nCbre can help you, but I\u2019d also find the nearest Walmart, find the owner and ask for a referral to thier insurance agent . People don\u2019t realize the potoential agents who cover these leased properties to have more in their books of business looking for spaces. \n\nAldis is the fastest growing supermarket in the country and I know thier real estate department has been growing.\n\nAnd if your in New England, message me I have a connection looking to lease 160,-200k sq ft for Netflix.", "replies": [], "depth": 1}, {"id": "if5qsus", "text": "You'll need to know whose leases are coming up for renewal and when.     \nBig boxes aren't where the money is.  Medium boxes with national chains.  The Big box is generally the anchor to the real money makers.  Having just the big box, or huge box, isn't going to be the best use of the land.  \nFree standing restaurants often just do pad leases.", "replies": [], "depth": 1}, {"id": "if5xpl9", "text": "Hire the most experienced and most reputable listing agent in the market. Owners not using brokers is baffling.", "replies": [], "depth": 1}, {"id": "if5zn7l", "text": "Minimal commercial experience. Extremely experienced in residential RE. \nFor me to answer your question, id see one  two routes. \n\nI\u2019d wine and dine the best real estate commercial broker, and understand the needs of people who lease that kind of property. Id build a backup plan for both sale upon build and lease as one or partitioned, and have more than one broker planned for each transaction. \n\nAlternatively, I\u2019d build relationships with local politicians and attend municipal/town growth meets and see how I could \u201cpitch\u201d my town to companies. Just like your MM itch, there\u2019s companies with an appetite looking for a nice town to expand into and y\u2019all just haven\u2019t met yet. \n\nI asked a mentor your question, a commercial big wig in my town, and he said:  \u201cwhy would I want to pay carrying costs in case a tenant backs out, as is common. I only take publicly listed companies series. I\u2019d put a jumbo sign up outside on the land with renderings of what I can do for the future businesses. I\u2019d print 1-3 renderings of the possibilities. If this is in a zone with other large buildings, I\u2019d see if any of them are spilling/bleeding over and need extra space. \nI\u2019d also look at buying pre existing and revamping. Unless building where you\u2019re at makes sense even with liberal estimating and pricing\u201d", "replies": [], "depth": 1}, {"id": "if74ytu", "text": "Would be more affordable to build an industrial warehouse and likely give you a larger potential tenant base. Would be worth examining as well particularly if you\u2019re close to the Highway and in a central-ish location.", "replies": [], "depth": 1}, {"id": "if7auaz", "text": "Good luck finding a big box retailer in a post-Amazon world heading into a recession that wants to be in your exact spot.", "replies": [], "depth": 1}]