how does that work on like the 25.00 a foot for improvements?
Most times, if you’re going into a brand new retail space the landlord has incentive packages to get tenants in there quickly. One of the incentives is a buildout allowance (or leasehold improvement allowance… same thing) to the tune of around $25/sq. ft. This allowance would be provided to cover basic costs, such as ADA restrooms, lighting, plumbing, etc.
Pazzo di Pizza writes:
j_0rkk - 2. Have the landlord agree to add the remaining portion of your buildout into the lease agreement for the term of the lease.
Can you explain this one a little more, I did not follow this suggestion.
Another quick question, when you say “buildout” are you referring to the putting up of walls, bathrooms, flooring, paint etc. and not a turn key space?
I talked to a local contractor about a buildout and was scared away when I was quoted about $100-125K for buildout on a 2000 sqft space. I later assumed this also included the equipment needed to open as commerical contractor would included these items in a bid. Does this sound correct?
In answer to the question about adding the remaining portion of your buildout into the term of the lease:
Let’s say it will cost $20k to finish the buildout and a 5 year lease. You have your landlord pay for it and you pay him/her back for the term of your lease.
Example - $20k / 60 months = an additional $333.33/month in rent
Also, yes… when I say “buildout” or “leasehold improvements”, this is in reference to putting up walls, floors, lights, paint, etc.
In reference to this contractor bidding $100k - $125k on the space… no. That bid was to do only the buildout for you. You’d still have to furnish your own equipment. The way contractors work is they’ll charge you by the square foot whether they need more materials or not. Whatever they come up with for a base cost, they then add about 25% on top so they can make good money off you. In my experience with contractors, they’re all crooks and try to make as much money off you as possible. Chances are, it won’t cost much more than $60k to put up your place… if that. Unfortunately, in this day and age, most city inspectors require a licensed contractor to do the work so it’s a catch 22 situation you’re in.