What are your thoughts on vape/smoke shops as retail tenants
We have been receiving more interest from vape shops than nearly any other type of retailer. Usually spaces between 1000-3000 square feet, some low rent in the expected spaces for this business type, others are ready to take fairly large spaces in high rent buildings. Have others seen this as well? Have they been good tenants? Anything I'm overlooking that accounts for the expansion?
[{"id": "j0vmv97", "text": "Much like other retail, there are good professional shops and then there are the fly by night operators. Vape shops will be a good fit for some centers and bad for others. Up to owner to decide based on their own due diligence.", "replies": [], "depth": 1}, {"id": "j0vt9pc", "text": "Is it a fit for the market and for your building/center? Some tenants won't want to be next to vape shops so be cognizant of that. Make sure to vet the individual groups and their financials. If you have a lender, might want to ask them too.", "replies": [], "depth": 1}, {"id": "j0vutgd", "text": "I have one vape tenant in four different properties. He\u2019s a good operator, but I would not lease to him in certain centers with tenants who would not want the co-tenancy. That\u2019s not because of him, he\u2019s a good operator. I\u2019ve said no to multiple other operators because I didn\u2019t like what I saw when underwriting. So, I would say it depends on the operator and the property.  I will also say in one of my properties near a large university, he pulls in more traffic than any other tenant.", "replies": [{"id": "j0wiggo", "text": "\\+1 to this. \n\nWe brokered a deal to a vape store operator who had a very high end interior and exterior build out within a 5-tenant strip center. It really is going to be operator by operator; ownership that we represented loved their build out, the way they had set up their business, and the \"class A\" services + feel. \n\nThat same ownership would typically have turned down (and has turned down) the generic smoke/vape shops that just don't really fit the general direction the center is going. \n\nAlso to Ok-Artist-5587's point; yes the non-permissible use thing does hit a lot of centers' exclusives and non-permitted uses so ... \n\nI'd figure out the general strategy and objective of the owner here. What type of co-tenants are they targeting and what type of tenants would want that particular vape or smoke shop you lease to as a co-tenant in the event their space goes dark.", "replies": [], "depth": 2}], "depth": 1}, {"id": "j0w4lwi", "text": "Please keep in mind that some lenders will not loan on a building which contains a smoke or vape shop. Less of an issue if you already have the property secured, but not a surprise you want either.", "replies": [], "depth": 1}, {"id": "j0wa8yb", "text": "Keep in mind that some master service agreements for larger properties (strip mall, mixed use center, etc...) will have this as a non-permissible use.", "replies": [], "depth": 1}, {"id": "j0wi4n2", "text": "Look out for noxious use clauses in other tenants leases.  This is often a prohibited use.", "replies": [], "depth": 1}, {"id": "j0x2eet", "text": "I have one tenant that has 10 very large shops. Great tenant. You will also get some that are horrible tenants just starting out.", "replies": [], "depth": 1}, {"id": "j0xr5ld", "text": "California just banned menthol and flavored vapes. Fda is pushing something similar on a federal level. So I'd be cautious.", "replies": [], "depth": 1}, {"id": "j0z8vl9", "text": "Personally I think cements the centers position as a class c in a market and limits your future tenants. (Lots of money to be made in class c retail but not as much to be made in taking class b to class c if that makes sense) \n\nI have talked to tenants that will not go in next to or near a smoke shop. Many CC&amp;Rs (for example an Target center) explicitly prohibits them. \n\nHowever I have signed leases in our centers for some CBD focused concepts that feel more medical than smoke shop. \n\nAgain, it\u2019s all about what type of customers the center serves.", "replies": [], "depth": 1}, {"id": "j1058l7", "text": "My family and I run a tobacco/smoke/vape/liquor store in the Midwest. I know there are places that might not want us, and there are also places we also do not want to be. Like any experienced businesspeople, we know who are customers are and where they are. There are places we would be glad to be with in the same strip mall: laundromats, cafes, fast food and small restaurants and pizza joints, bars, check cashing places, to name a few. I can\u2019t speak for all business owners but, due to the nature of the business, we go to great lengths to maintain our strip mall. We are open the longest hours of any other shop. I will be the one who alerts the landlord of any problem, has left vehicles towed away, makes sure the plowman is doing a good job, reporting any violations or maintenance problems. I chase away panhandlers and people who try to loiter there, and make sure there is no soliciting. I invited a local group which gives away free local produce to underserved citizens, to come regularly and set up tables. There are some local government officials who call on me when they need a venue to interact with local residents, be it for local planning initiatives, bike safety or distributing health information. The other tenants couldn\u2019t be bothered and the landlord knows he doesn\u2019t have to think about it because I will let him know right away of any issue he needs to be aware of. We go to great lengths to keep the place from becoming shady. I think that proactively maintaining a good and safe environment is more on the minds of business owners like us. It\u2019s true that we may be more of a magnet for a certain kind of customer so we are more on top of preventing any foolishness.\n\nIf you are just talking about vape and nothing else, not much to worry about there, except whether they can make a go of just vape. If you are in a place that also can sell cannabis vape, and nothing else, then I would say not much to worry about, either. You will only get those customers and they are not much problem. If they give a professional and upscale face on it. Once you get into \u201csmoking accessories\u201d and \u201cnovelties,\u201d then you are going to attract the curious teens and wannabe hippies, etc., who may not be what you want.", "replies": [], "depth": 1}, {"id": "j10ssn4", "text": "Do your due diligence on the operator.  We are finding enough strong operators that our policy is that we won\u2019t lease to an smoke/vape tenant with less than 3 operating locations that we can visit to get a feel for their operation.\n\nWe like to get percentage rent above the breakpoint when we are offering a high quality locations with strong operators.\n\nWe have smoke shops doing more than $3,000/sf (for reference, that\u2019s stronger sales than the average Tiffany and Co) - quality operators can be great tenants and solid co-tenants that drive alot of trips.", "replies": [], "depth": 1}, {"id": "j13deii", "text": "All good advice on here.  Ask your insurance broker about it too.  Make sure it\u2019s not going to give cause to seek coverage in secondary markets at higher premium due to sales of delta-8 products, or other products.  Rely upon the restrictive covenants in your lease, and consider adding additional restrictive covenants for products and business conduct.", "replies": [], "depth": 1}, {"id": "j1m9k2c", "text": "Same, we have a freestanding 1700+ Sq Ft building that had a  national tenant and we are getting the same but from start up companies, we wont entertain  it.", "replies": [], "depth": 1}]