How do I negotiate?
Hello. I am trying to relocate my current clothing business. My store is currently in a Flea market but they are closing that place down. I want to open up a store next to a Walmart. It’s in the outskirts of Atlanta. I won’t be competing with Walmart since my clothes are different than what they offer. But this is a vacant Payless w/ 2800 sq. Ft. And they are asking for $7556 a month. This includes rent cam and insurance. This almost sounds double of what I’m willing to pay. How can I negotiate? Are they just trying to give me a super high price before negotiation or do they really think that someone should pay THAT much for a space in a shopping center?
[{"id": "ey8293v", "text": "You would be best served by finding a broker to represent you in a lease transaction. $2.69/SF MG doesn't sound out of range for a regional strip center in a major metro area with an anchor tenant like Walmart, but a commercial broker who specializes in retail and knows the local market will do the best job negotiating on your behalf.", "replies": [{"id": "ey8rvle", "text": "Agreed here. A retail tenant rep broker will either know what market rents are or easily be able to find out using resources you don't have access to. There's no benefit the them asking a high rate to keep you out. They can just not accept your offer. Without knowing more info the disconnect is it's an expensive space compared to what you were thinking. Walmart anchored makes a huge difference. You could look in unanchored space or just less expensive space. Have a broker help you.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ey82dno", "text": "You\u2019re not going to be able to negotiate the rent down by half. Maybe 10-20%. Find another space.", "replies": [{"id": "ey8banm", "text": "Darn. That still keeps me at 6K. Not bad but would like if it was better.", "replies": [{"id": "ey8ny8t", "text": "Things to keep in mind - \n- the NNNs (taxes, insurance, grounds maintenance) won\u2019t be negotiable so ensure that\u2019s factored into your budget effectively \n- generally ownership will request term (typically 3-5 years) which will help you on lease rate\n- generally the closer you take the space to \u201cas is\u201d, the more negotiating room you may have\n- you can ask for things like a step lease, whereby you start out with a lower rate and gradually increase the rate annually to get to an amount ownership is comfortable with\n*You will not be able to negotiate properties down by half though* this is so important to note", "replies": [], "depth": 3}], "depth": 2}, {"id": "ey9bdgr", "text": "Why not? You never know unless you try. Just do it! What's the worst they can say?", "replies": [{"id": "ey9cno5", "text": "Sure - shoot out an LOI, just don\u2019t waste much time and keep working on finding a spot that is more affordable.  If he\u2019s stretching now he\u2019s going to regret it later.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ey83tap", "text": "I would 100% find a broker in your area that's able to help with this. It doesn't cost you anything and the knowledge they'll bring will help you gain the leverage in order to get a more aggressive deal. If you need a recommendation, please feel free to PM me. Happy to help however I can.", "replies": [], "depth": 1}, {"id": "ey8599e", "text": "The leasing agent is paid by the landlord so you shouldn\u2019t have to pay anything to use their services and they can negotiate parts of the lease that you may not have even considered yet. There\u2019s more to negotiate than just the rental rate, you can get free rent, money for tenant improvements, and other items that your leasing agent can point out to you.", "replies": [], "depth": 1}, {"id": "ey85ssx", "text": "I wonder if going from a flea market business to a strip mall is too big of a step and you change the style of your business too much.\n\nWhat about considering a pop-up type business plan?   \n\nThere is likely lots of vacant retail space...  The Atlanta area is huge.  You could could contract for short term rental space... Maybe 30 days at a time,..   Then move to a new location.   It's good enough for those Halloween stores we see every year!\n\nI bet that most stores get their best traffic when they open.   Pop Ups operate like flea markets...  No return policy, when it's gone it's gone...   Etc.\n\nGood luck with your business!", "replies": [], "depth": 1}, {"id": "ey8h73z", "text": "That\u2019s ~$32.40 PSF including CAM reimbursements.  Try to find out what\u2019s market.  Maybe you can knock a couple dollars off.", "replies": [], "depth": 1}, {"id": "ey8trup", "text": "Also find out if there will be percentage rents charged. You will definitely want a broker to represent you, and to inform you.", "replies": [], "depth": 1}, {"id": "ey97vyv", "text": "I've done leases for old Payless stores around that size for over $9k per month not including nets. \n\nFlea market is not the same thing as a shopping center anchored by WALMART. You are wasting your time 'negotiating' for this space.", "replies": [], "depth": 1}]