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Old 12-18-2003, 12:27 PM   #1 (permalink)
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I was given an option on my lease for either 3 or 5 years with option to renewal.

What have some of the owners done in this case? I am not sure which to do.

Thanks!

Susan
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Old 12-18-2003, 01:18 PM   #2 (permalink)
 
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how long have you been in the building already? has business been good to you there? will you get a better deal per month renewing for 5 yrs vs. 3 yrs??
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Old 12-18-2003, 03:09 PM   #3 (permalink)
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I will be the new owner as of Jan 1 if things go as planned.
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Old 12-18-2003, 04:08 PM   #4 (permalink)
 
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Depending on the rate markup for years 4 and 5 I would probably sign the 3 year deal knowing that the renewal option is there. If the rate for years 4 and 5 is equal or slightly over year 3 then the 5 year option may make the most since. You have to take an educated guess on what your market rents will be considering the economy in your area.
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Old 12-18-2003, 09:00 PM   #5 (permalink)
 
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Do you have room in your current location to expand, should the time and money be right? If not, sign the 3 year one. If you have the time and money to expand and the business is there to support the expansion, if you are locked into a 5 year lease, it will hinder your chances of expanding.

Just a thought...
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Old 12-18-2003, 09:13 PM   #6 (permalink)
 
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I did the 3 year lease just in case things did not go well with the owner of the building, and also because I was scared business might not do well -and I wouldn't be able to carry the lease myself for 5 years. Now my lease is coming to an end and I decided to build instead of renewing another lease. My lease is $20,000 a year here, so it wasn't that hard for me to decide to build after paying $60,000 - Sometimes I wish I had just built my own building and that I had applied all that hard work to something I would eventually own. But you've got to do what you have to do and you hope it works.
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Old 12-18-2003, 11:41 PM   #7 (permalink)
 
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Amen to that!
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Old 12-19-2003, 02:41 AM   #8 (permalink)
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Tanning salon do better overall in plaza that have good foot traffic. The ecomonic gain of owning your own stand alone building is great. But it has it's pitfalls too.

It comes down to the same old saying "location location, location."
BTW is this a gross lease or do you pay CAM?(common area maintenence)
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Old 12-23-2003, 09:31 AM   #9 (permalink)
 
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I went with a 5 year on one of mine and I wish it was only 3! The shopping strip has gone downhill in a hurry and I don't think the landlord is doing anything to get new tenants in there. That hurts all of us. Plus a new strip is going up around the corner. In hindsight, I would have only done three and then I could have shut the place down in 1 1/2 years and taken my equipment elsewhere.
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