How do you convince property owner that this 2110 and not 2005?

Unfortunately, most people that own buildings are looking at them as a bonus investment, they actually do other things for the real money.  Or worse, they are part of a management investment group, these people have set goals and ideas about what they want done, so even dropping rent prices or getting something changed in a lease is an act of congress.

Here comes the real fun part. Some don't give a flying fart if they rent out the space, the money they lose is just a tax write off and a calculated one at that. Does it really make sense to people like me? Nope.

 

Tell me about it!  High rents was the reason we left our place (it was actually going  to increase). 

There was talk here about rents being reduced-but personally I don't know of anyone who actually had a rent reduction.  I suppose to be fair, some landlords cannot afford to reduce their rents, and they stick it out hoping that someone will come along eventually.

 

Meh...
Before we moved into this place, we looked at a half-dozen others of which, two are still vacant, and that was 3 years ago.

Some landlords are very sneaky and get a tenant to develop the property, then find a way to boot him out, and then lease out the same place as a fully functioing business.

 

Thats true too foodpump and it is kind of what happened with us.   Re. the places that are still vacant after many years-there are people out there who just don't need the money (I know one man who won't take any reduction on the rent- it has been vacant for a year-he just doesn;'t need the money that bad)

 

On the other hand, mall management is usually easier to deal with. They want their storefronts occupied, and will often all but give it away just to have a business in place so they have the appearance of being filled up and successful.

Friend of mine had a place and expanded into two other empty stores at no increase in rent, for that reason. More recently, a Chinese restaurant in town expanded into the store next to them, again at no increase, just to have the place occupied.

So a lot really depends on the nature of the business and where it's located.

 

 As the real estate broker says,"location. location. All depends on that. Malls are usually easier to work with however they want personal signature guarantees. Believe it or not even some malls depends on what side your on. I did a study here in Florida. I most Publix based malls the store to the right of entrance facing publix seemed to do better then the ones on left. My logic being when you drive in most people are right handed and tend to drive and park on right side.This not only applies to restaurants but other stores also. Maybe crazy but thats what I see here.

 

My experience with malls was different....

Rent is VERY high, and even more so if you're in a food court.  But the mall also wants your daily sales figures:  Not enough and they you kick you out, (no compensation for any leasehold improvements) too much and they want a bigger slice.  After rent, they also want you to pay for advertising fees, and if you're indedependant (which I fiercely am), you don't have the advertising clout the larger chains have, and are deemed somewhat undesirable.

 

Man it sounds like the landlords in Florida are not taking any prisoners!
In London the cost of rent is not the problem its finding a catering premises thats the nightmare. We've got thousands of vacant restaurants on the market but if your a caterer you dont wanna pay for a restaurant with a massive dinning area when all you want to use is the kitchen.
If any of you guys has got a couple $mil spare come to london, buy an empty wharehouse, convert it into small fully fitted self contained catering units and you'll be laughing all the way to the bank!

 

Try strip malls -- big enclosed malls are dinosaurs to the real estate market. Landlords could give a rat's a** about your food/labor/utility costs -- they just want the rent money. Look at strip malls in decent locations -- they're way overbuilt/underutilized. And find a commercial rental/leasing agent -- they can put you on some decent deals.

Finally, don't hesitate to make an aggressive offer. Landlords aren't used to being told this is what you'll pay. Don't just ask what their offer is.

BH

 

A friend just came out with a new "hair wrap" that covers pony tails that is just hitting the market.  It is absolutely perfect in containing hair (so that it can't end up in someone's food).  Does anyone know the best way to get this out to the food service market?   The product is on line at www.wrapter.com.   It was originally meant for the motorcycle crowd, but I believe it would be awsome for cooks and food service personel (after I found a hair on my pizza)!

Check it out and reply if you have any tibits you would be willing to share.

 

As someone that lives in Florida (Orlando) and someone that has beening tracking and looking at spaces for about 5 years, I'd like to add my 2 cents.

The Commercial market is now approching the type of bottom the housing market hit a few years ago.

There are tons of restaurants sitting empty. The cost of high lease terms when the economy was good killed some, others built big menus that required lots of labor, and thats what helped their fall. This was on top of shifts in population, poor managment,people just retiring etc...

I tracked a restaurant in Clermont Fl for 13 months. It started (for sale) at 279K, when it reached 229K I went and looked at it. I didnt bite due to it needing a grease trap and I also got a bad vibe from the City. The agent called me a month later and said the guy justs wants something close to 180K.

The space I'm looking at now in metro Orlando is in a strip mall. When the guy saw I had lots of experience and a fresh concept idea, he started throwing money AT ME!!? Saying he would go as far as offering us an interest free loan if the bank wouldnt give us all the $$.

5 years ago I was at the owners mercy, now the shoes on the other foot. I'm giving them the same mercy they offered me.

This is a GREAT time to open a restaurant.

2 more things:

1) Malls??!! Malls are dying at an alarming rate..when you start seeing tatoo parlors in malls, you know its in trouble. Stay away!

2) I disagree with "location, location, location"/// prepare good food, provide good service with a great value and they'll drive to the hood, or down dirt roads to see you...I think agents are the ones that came up with that slogan.

 

Pass the bar cheese and bagel chips! 

I'm not sure who posted that malls are easier to work with but it certainly illustrates how things are different from one region to the next. Here malls are very difficult to work with but we have some very high end malls. In my area if you open in a mall you are forced to use the owners contractors for any lease hold improvements. Triple the cost of what you would expect. In addition square footage is priced very high and leases are usually triple net. On top of that you have to give roughly 15% of your take to the mall on top of your rent. Operating a good business and paying your rent is not enough. If the mall owner believes that your space can yield a higher monthly net from some one else out you go when your lease is up and there are no long term leases.

Strip malls are a different beast.

We are seeing more of a return to Detroit's older areas and people are traveling from the burbs for good food. Still there are other factors. City taxes, crime and relying more on hockey, football, theater and other events to get people to the city.
 

 

Nope, that sounds about right,  I remember 4 years ago when we were opening up our current business, and we were looking at used POS systems.  The one place we were at had over 120 of them, said they came from one of the higher end malls.  Mall management got rid of them when they found out some of the tennants could get pass the system and charge customers without it showing up on the mall's main server.........

IMHO, after negotiations with several malls (and all of them falling through), malls need advertising like a crack addict needs crack.  Go into any high end mall and for the most part, all you will see is chains: food chains, clothing chains, Dept chains, etc.  And almost all of the chains have national and local advertising campains, more grist for the advertising mill, and bringing in more customers to the mall.  This is one of the main reasons independants are so frowned upon in the malls. 

Location has a huge impact, but even more importantly, so does parking .

Strip malls aren't  such a bad deal, and parking is usually fairly good.

Catering businesses don't usually rely on walk-in traffic, they rely on their "litle black book" of customers and sales,  For this reason they don't neccesarily need high traffic/ high rent  areas to operate out of.  You can negotiate with a lot of confidence knowing full well that you can move to a new location within 3 mths and not miss a beat in business.  My very last landlord didn't realize this, and I called his bluff.  It was one of the best moves we ever made, and the schadenfreude is, the landlord was forced to rent my unit as conveted as office space at a much lower rate then what we were paying.

I've been landlordless since 2002, and am very happy about it....................

 

So true about parking. Ive looked a couple of nice locations, but lack of parking killed it...as to having no landlord...I want to be you one day, congrats!