Pushing the issue to get retail space in plaza and contacting business directly
Hi all! There’s a space in a local plaza I am after — only spot in town with a drive thru (not even being used). The retailer in there is struggling I believe. It’s a seasonal business and they had a cease and desist on their door not too long ago before figuring something out with management. However, I’m sure they’d jump at the opportunity to get out of the spot. My question is how do I do it? I don’t want to pay goodwill or cost for their furniture because it is not my intended use. I simply want the right to their lease. I’ve reached out to the broker prior and he said all spots are taken at the moment but I’m thinking sending a letter of interest directly to the business stating I am interested in overtaking their lease. Perhaps they’ll be happy to get off the hook even with no money if there is a personal guarantee in play? Thoughts from the more experienced?
[{"id": "gnzzzt1", "text": "A lot of small business may be struggling, but will do anything they can to keep doors open. It is generally their whole livelihood, whether or not you think it seems profitable. If they haven\u2019t abandoned the space, and the broker isn\u2019t implying that they may be interested in leaving early, you may be out of luck.\n\nIf you did contact the business directly, I would recommend offering some sort of significant payment to them to help them relocate. If they really didn\u2019t want the space, they\u2019d probably already have left. Approach it as a business proposition, and don\u2019t insult them by saying anything about \u201chelping\u201d them since their business is failing. You want the space so you can make money. Approach it that way.\n\nSide note, as a broker, something that really annoys me is strangers calling telling me how bad some current tenant is doing and how their business would be sooooo much better for the landlord.", "replies": [{"id": "go00kqh", "text": "Totally fair assessment. This is actually a case where the owners are white coat professionals and I highly doubt it\u2019s their entire livelihood. Trust me I have no idea for sure if my business would work there \u2014 it\u2019s always a risk and no amount of work ahead of opening ever translate to success I\u2019ve seen. However I just feel this space would have us best succeed. I\u2019ve seen cases where a tenant wanted to leave the space but had too much to lose in a lawsuit (also a white coat professional in this case) and so they just negotiated the rent down and paid until they could not exercise the next option, so I guess my head immediately went there. Thanks for the advice, much appreciated!", "replies": [{"id": "go30yhw", "text": "If they could sell the business that would be their first choice. Most tenants operate under an LLC, so if their business fails they just bankrupt the LLC - its not ideal but the landlord can\u2019t go after them. I\u2019m guessing you run a restaurant, is there other space available in the center? Perhaps you could get them to trade spaces by offering the landlord more rent, longer lease, et cetera. \n\nAlso, as a broker, I\u2019m always interested to talk to some one who\u2019s interested in my listing especially if it adds value to my client.", "replies": [{"id": "go4dlcd", "text": "Thanks for the really helpful advice \u2014 ended up reaching out directly to the broker yesterday! Curious about the LLC and bankruptcy though. Is a personal guaranty on commercial leases not extremely common in your neck of the woods? It\u2019s extremely rare here to not have to personally guarantee the execution of the lease.", "replies": [{"id": "go4lzhr", "text": "A personal guarantee is very common, but unless it\u2019s a big name tenant it\u2019s often more trouble than it\u2019s worth to actually go after them for defaulting. And, it\u2019s not like they\u2019re walking away scot-free they didn\u2019t default because things were going well.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "go0p11s", "text": "The only thing you can do is to keep in contact with the broker. Even if you were going to re-lease a space you would ...... need to talk with the broker.", "replies": [], "depth": 1}, {"id": "goc68h6", "text": "what's stopping you? you're allowed to talk with them. i'd just ask them what's going on and what their plans are. for the actual leasing contract  you probably need some help", "replies": [], "depth": 1}, {"id": "gogci8x", "text": "I would contact the business owner directly. Ask pain questions that will verify your assumptions of the business failing or not. There's nothing worse than assumptions with no validation. Sending the letter would not guarantee a response. Search the business tax database in the county that the business is located within. If it's under an LLC, then search the business owner.", "replies": [], "depth": 1}]