Seeking Advice - First Time Renter of Commercial Space for a Bakery
I'm starting to look at commercial spaces for a bakery. I was hoping someone can give some advice on negotiating a lease, proper questions to ask, things to look for etc. Saw my first space this morning and realized how clueless I was.
[{"id": "ed6qasn", "text": "First, I would advise that you use a broker. A broker\u2019s services will cost you nothing out of pocket (the landlord pays their fees at closing). A broker should also be extremely knowledgeable and will save you time, money, and effort so that you can focus more on your core competency. JLL, CBRE and Cushman &amp; Wakefield have national presences, and will have people specializing in retail tenant representation. \n\nMost retail spaces have a \u2018Triple Net\u2019 or \u2018NNN\u2019 lease structure, meaning the per square foot rate the landlord quotes you is \u2018Net\u2019 of operating expenses, taxes and insurance.  Make sure you ask for the OpEx Estimate to get the full financial picture. E.g. the rental rate is $15/SF NNN, and the NNN = $5/SF, the total occupancy cost will be $25/SF/year.\n\nAsk for a Tenant Improvement Allowance (which is negotiable), usually quoted on a per square foot basis. This allowance will help you offset your costs to construct the space to your liking.\n\nThe length of your lease is a big negotiating point, and landlords usually require a 3-year minimum especially if they are giving you a T.I. Allowance.", "replies": [{"id": "ed6u6c9", "text": "I'm compelled to repeat that a broker is free. They know what terms are market-- allowance, security deposit, free rent, early exit terms, etc. Also, you might encounter a \"percentage\" lease in which the landlord gets a percentage of the gross receipts. This lease structure usually shocks new business owners when they learn it is common market practice in some places. A good broker will explain the pros and cons of pct leases, and capture value that is peculiar to pct leases.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ed6rc7o", "text": "I'd definitely recommend using a broker. It won't cost you anything and it will ensure you are getting similar terms to comparable deals in the area you're focused on. You didn't mention the state/submarket you're looking at but my company has a national presence and I'm happy to refer you to a broker in your area that's worked on similar requirements if you send me a PM. ", "replies": [], "depth": 1}, {"id": "ed6w9sa", "text": "I am a Broker in Upstate NY and would gladly share my 30 years of experience with you.  Feel free to call Ozzie 315-410-0373 or email ozzie@syracuserealtygroup.com \nNo charge, glad to help", "replies": [], "depth": 1}, {"id": "ediexn9", "text": "Use a broker. It will cost you less overall (You will not have unexpected expenses, and often, Brokers are able to negotiate better rates, especially if they're a big firm). You also have lower risk, and people with experience to represent your interests.\n\nYou should call a local broker in your city, preferably from CBRE, VOIT, Cush/Wake, or another large firm.\n\nYou can call Brian Mulvaney if you just want advice, 8584583372, or e-mail at bmulvaney@voitco.com. He has CCIM and SIOR membership, as well as 20+ years experience, if you'd like some good advice. He would probably recommend you find someone local, but I know he'd be willing to give you some advice. ", "replies": [], "depth": 1}]