cocotan

As I narrow down my search for a location I am beginning to see how important it is to really negotiate your lease. I was wondering what sort of things you have negotiated with your leases.

Is it more important to get the smallest monthly lease possible...or would you prefer to take, say 6 months free rent to start...or how about build-out allowances...or is all the above possible?

Any thoughts would be appreciated.

John S. Soet

A few things are very important to cover. First is signage -- you have to let people know you're there. The landlord's signage policies need to be very clear. Second, exclusivity. What happens if you open a tanning salon and a beauty shop a few doors down decides to put in some beds or a spray booth? Then there's the length of the lease. If you have a great location, you may want a longer lease. The ability to sublease in case (Heaven forbid) you don't make it. Whose responsibility is it to maintain the AC? And, of course, how much build-out time is available. A lot to consider.

sunburnot

I've held leases at 4 different locations, ( 2 of them different businesses) each landlord was different,all triple nets. 1st one was very low rent, and the owner was fair, but when he died and left it to the wife nothing was taken care of! we left at the end of the lease. 2nd one we did a complete new build,signed a 4yr lease with the landlord doing all electrical,plumbing, walls. counters,paint,carpet,wallpaper,all from our blueprints even up sized the a/c for free after opening because 1st one was to small. He did monthly pest tmts inside & out and would even do repairs on toilets,doors etc @ no charge. We had 700sf @18.25 per. a little high but I need to say that this was a new plaza and we were the 3rd tenants to sign. He was fantastic and knew how to keep his tenants happy and this man is 80 yrs old and one of the biggest developers in Fla. We sold that business at the end of the lease.
3rd and current one: Typical landlords! Pay them $ and you don't see or hear from them unless you hound them about something they are responsible for, which is the roof and the parking lot and thats about it on a Triple They would not negotiate on ANYTHING! BUT the rent was amazing for the current location 905.00 for 1000sf on one of the busiest roads here! and the buildout was already in place, so we took it and the other tennants are the best so it has worked for us so far. Look into the CAM (insurance, property taxes common area expenses etc) these are additional charges in the rent but each year if they go up do you pay based on your sf or do they just divide it between all the tennents? Remember the guy with 4000sf should pay more than the one w/1000sf. It will be in the lease, If you can get them to give you a couple months free for you to do buildout and get up and running for say, a longer lease term,Great, but unless your opening is in the high season you might be sweating it till it comes have backup cash for operating. Same goes fo them doing the B.O for a longer lease, if so try to get as much as possible from them for the shortest extension of time it does'nt hurt to ask and ask again!
My opinion on lease term, and nobody yell at me please, you never know where life is going to take you,if your investing a lot of $$ make it long enough to recoup and double it,with an option to extend or sublet @ a fixed rate hike per yr so you can plan ahead.You might not like the business or spouse gets a transfer or whatever, you want a way out, selling can sometimes take years. Example: I sold my second location 1 yr ago this month ,with them assuming the remainder of my lease of 15 months w/ a 2yr opt, by Oct it was up for sale do to spouse getting very ill, they paid employees to run it , could not take any pay and the (d#m) broker sat on his a#s! Spouse died, and was going to shut it down the end of this month and wasn't able to pay rent for the last 3 and low & behold in comes the broker w/ a buyer for 1/2 the listed price, lost 30k from orginal purchase price plus any income derived from actually being a hands on owner! It happens! I like a 2 or 3 yr with same for opt. This way I can show profits, the equipment is not outdated and it has a loyal base, so I can choose to stay or I can sell if need be,and the next owner can negoiate to keep the opt or get something out of the landlord if they want longer. You need to take it all into consideration, not just now or 1 yr down the road. Good Luck!!

Beach Club Tans

Good info sunburnot.