Lease signing
- Thread starter joeydyna
- Start date
aroaster83
New member
- Dec 30, 2012
- 40
- 1
Generally speaking, you want to minimize the amount of zero time your lease results in because paying for a space that has no customers is just wasting money. Get as much leg work done as possible so you can sign that lease and get work started. That includes knowing what equipment you're going to use (and confirming it will work in the space you're selecting), having an interior/retail designer on board who is ready to rock, having financing squared away, etc. Basically, have all your ducks in a row.
The biggest mistake I witness is people who pick the space and have nothing else settled. They lock into a lease and don't have any idea of what gear they need or have to shop around for an interior designer/plumber/electrician etc. It's wasting money. Money that could be spent on other things or simply saved.
Edit: Pro-Tip Know someone with a coffee cart? Already selected a coffee roaster(s) you're going with? Ask your landlord and local permitting agency if you can setup a pop-up inside or outside to start generating interest and revenue while the inside gets built.
The biggest mistake I witness is people who pick the space and have nothing else settled. They lock into a lease and don't have any idea of what gear they need or have to shop around for an interior designer/plumber/electrician etc. It's wasting money. Money that could be spent on other things or simply saved.
Edit: Pro-Tip Know someone with a coffee cart? Already selected a coffee roaster(s) you're going with? Ask your landlord and local permitting agency if you can setup a pop-up inside or outside to start generating interest and revenue while the inside gets built.
Last edited:
John P
Active member
- Jan 5, 2007
- 1,057
- 4
Always look at multiple properties.
1) whatever rate they are asking, no matter how good, is too much.
2) NEVER trust their measurements. You only should pay for USF (usable square footage). So (pre YOUR build out) if there are pillars or support walls, you have to subtract the space those things take up. Also whether it's 50' or 52' matters. Take your own accurate measurements and compare.
3) Longer is better 5-10 years is best for initial lease. And do it in terms of months (60 months, 120 months) and put in options if you can at already negotiated terms)
Also, it's a NEGOTIATION, it's not a compromise. Know the difference.
Example of compromise:
Lessor: We are asking $30 per square foot, NNN.
You: I'll pay $25
Lessor: I can do $28
You: How about $26?
Lessor: Done.
Negotiation:
Lessor: We are asking $30 per square foot, NNN.
You: I'll pay $25
Lessor: I can do $28
You: How about $24, 60 days rate abatement for buildout?
Lessor: The lowest we can go is $26, not sure about rent abatement
You: How about $25 and you pay for all electrical and plumbing
Lessor: How about $26 and we'll include all electrical and plumbing... but no rent abatement.
You: $26, all electrical and plumbing, and 30 days rent abatement.
Lessor: Done.
And most negotiations will take a number of weeks, unless they only have one property.
1) whatever rate they are asking, no matter how good, is too much.
2) NEVER trust their measurements. You only should pay for USF (usable square footage). So (pre YOUR build out) if there are pillars or support walls, you have to subtract the space those things take up. Also whether it's 50' or 52' matters. Take your own accurate measurements and compare.
3) Longer is better 5-10 years is best for initial lease. And do it in terms of months (60 months, 120 months) and put in options if you can at already negotiated terms)
Also, it's a NEGOTIATION, it's not a compromise. Know the difference.
Example of compromise:
Lessor: We are asking $30 per square foot, NNN.
You: I'll pay $25
Lessor: I can do $28
You: How about $26?
Lessor: Done.
Negotiation:
Lessor: We are asking $30 per square foot, NNN.
You: I'll pay $25
Lessor: I can do $28
You: How about $24, 60 days rate abatement for buildout?
Lessor: The lowest we can go is $26, not sure about rent abatement
You: How about $25 and you pay for all electrical and plumbing
Lessor: How about $26 and we'll include all electrical and plumbing... but no rent abatement.
You: $26, all electrical and plumbing, and 30 days rent abatement.
Lessor: Done.
And most negotiations will take a number of weeks, unless they only have one property.
Last edited:
aroaster83
New member
- Dec 30, 2012
- 40
- 1
All solid advice here. I love this forum. Hugs all around.
- Thread starter
- #6
That sounds like awesome advice! Thank you! We aren't quite ready to sign anything but we found a spot we like and are going to meet with the landlord more or less just to get some experience with the whole process and we will definitely take all that information and use it!
Once we decided that a coffee shop is what we were going to do. We started to look at potential places, but didn't sign any lease. We 1st spent 6 months lining up builders, plumbers and other trades people for the build out. I was lucky and had a garage so I even purchased the ALL the equipment before hand knowing what equipment we would definitely need to open. I suppose a storage unit would be cheaper if you don't have a place to store the equipment. Once we knew we had everything we needed we approached to 2 towns we narrowed our location to and made sure there would be no issues having a coffee roaster/cafe in the town. We signed a lease with a month abatement for build out. It took 29 days once we signed the lease to open. I realize that we were able to open quicker then most but just get everything done ahead of time that you can.
healthystuff
New member
- Oct 23, 2014
- 9
- 0
Agree. Lease can be a solution if you're so sure of your business. But if you're just starting out, look for a place that can benefit your finances as well. Pretty sure there are plenty of commercial business places that can offer best monthly fees. If you have bigger investment and really hope that you will increases your ROI then, leasing can be an option too. If everything fail, then its part of the business -- loosing something and learn from it.
