Advice sought on LL requirements on Retail lease for businesss start up
Starting a new biz with a buddy.  Needs a retail location but the biz has no track record, no other stores and will be a freshly minted LLC. What can we expect the LL to ask for for them to be comfortable doing a lease with us?
[{"id": "igh620e", "text": "It really changes based on landlords. Be prepared with a very thoughtful business plan and presentation on the business. Know what you want to do and how it will be successful and funded. You won\u2019t know all of the details but get as many as you can. Start at the sba for a template of what they would want. Be prepared to personally guarantee the lease and not get as favorable of terms. Be prepared and be thoughtful.", "replies": [{"id": "igh8by6", "text": "Thanks. It's not a 'new' biz in that no one has done it. It's just a new entry into a market we think is underserved.  It's not complicated or unique, so larger LL may have already had clients like us before.  I'm a residential LL and business investor so figured someone would have to guarantee it and I have the means to do that and to fully fund it for 3-5 years and the net worth and credit rating to back that.  We have a detailed financial plan but not sure that is any of the LL biz,  I just don't want a 5 year lease.  If it crashes and burns in year 2 I want to limit my exposure to a long term lease. 3 years is all I am willing to commit to. Is a personal guarentee going to  be enough? Would they want some sort of large deposit or 6 months pre-paid?", "replies": [], "depth": 2}], "depth": 1}, {"id": "ighe1ae", "text": "It has a lot to do with the level of investment the landlord needs to put into the space.   If your taking a space \u201cas-is\u201d, the bar is much  lower.   If your looking for the landlord to deliver you a turnkey space or contribute TI, then expect to be scrutinized like you are taking out a loan (because that\u2019s effectively what your doing).\n\nIt also comes down to options.   If I have a high profile (and therefore more valuable) space it\u2019s not going to an unproven operator.  If I have a more challenging space I\u2019m more likely to give a new operator or new concept a shot.", "replies": [{"id": "ighg1d9", "text": "Thus far everyone we talked to has included TI in their basic package pricing. That said we don't need much, a couple of private offices, a large communal space and a bathroom along with parking for 15+ vehicles. 1500 sqft will do for us. Simple and cheap. Several spaces we've looked at are remarkably turn key. Probably under $10,000 for TI, less than has been offered.  The brokers keep saying occupancy is 96% but just randomly driving around areas that fit our demographics and we're finding plenty of unrented retail. Not sure what they are quoting but we're not motivated by FOMO, when we find the right location we'll move on it.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ighnvgt", "text": "Put up a decent sized deposit and ask for a burn-off, essentially money back after a defined period if you don\u2019t default on the obligations of the lease.", "replies": [], "depth": 1}, {"id": "ighnzki", "text": "To ad to the info, be prepared to show potential landlord your professional resumes and show that you ideally have relevant experience in the business area you will be operating in.\nIf you\u2019ve never worked in this business area, be prepared for some skepticism by landlords.  \nSuch as, you want to cut hair but are not a hairdresser or barber. (Just an example).  \nFranchisees provide training so where did you get yours?\nI am not saying landlords will say no, just be more skeptical maybe.\nAlso, with your business partner, what are the dynamics and arrangements in your partnership?  What happens if you don\u2019t agree 1 year in and one of you walks, can the other take over?  Landlord will likely ask for both personal guarantees so you could be on hook for partner and vice versa.  Just speculation at this point but worth thinking about at beginning to have a partnership agreement.", "replies": [], "depth": 1}, {"id": "igicumh", "text": "At least 2 years tax returns, bank statements for the owners, a business plan.", "replies": [], "depth": 1}, {"id": "igimmji", "text": "Most will ask for a personal guarantee, ie they can come after your personal assets if the business fails.", "replies": [], "depth": 1}, {"id": "igjtfjt", "text": "1. Strong financials.\n2. Personal guarantee for full term of lease.", "replies": [], "depth": 1}, {"id": "ih0oggf", "text": "Personal guarantees and likely increased security deposit. LL will try to shorten free rent and keep TIA as close to 0 as possible.", "replies": [], "depth": 1}]