white box

ok lets say I found a great location for a new store,
its been vacant for 2 years
its just a shell
WHEN I go into lease negotiation. What can I ask for?
besides free rent for say…3 months is it out of the question to ask for tenent improvements?
can i ask to put in a tile floor?
can i ask him to remodel the bathrooms?
I know I can ask for anything but what can i expect

There really is not a standard thing to ask for. If its been vacant that long they are either desperate or are in no hurry to do anything. First thing to do is get your ducks in a row and find out what everyone else in the area is doing and then ask them what “they” are offering. TI’s and intinial free rent are pretty common place. Asking for specific things like tile floors really doesn’t make any sense unless the landlord also owns a tiling company. Common extra things to ask for are retrofitting electical boxes, plumbing and gas lines, air conditioning, replacing glass, landscaping or parking improvements (alocated parking), special signage, first rights of refusal on adjacents spaces, sub-leasing option, sewage line upgrade (grease trap), having them build a patio area, etc . . .

How much to list depends on the market or who is dealing from a position of strength, but definitely ask for numerous things so they can say no to some things.

Make sure you take the time to provide strong financial data so that they will feel confinent about you which may influence what they will do for you.

If it’s been vacant for two years I’d ask the landlord to do everything. However, chances are, you won’t get away with him supplying the entire buildout so make sure you get at least the following to be supplied by landlord:

  1. HVAC - 1 ton of air per 200 sq. ft.
  2. Two ADA restrooms
  3. Ceiling tiles installed
  4. Lighting installed
  5. 200 amp circuit breaker
  6. Firewall installed and/or sprinkler system as per code enforcement
  7. All underground plumbing run and floor repaired/filled
  8. Tiled floors throughout (ceramic in customer area, VCT or other cheap tile for kitchen and storage area).
  9. 3 year lease (so you can get out if needed) with two 5 year options on the back end.
  10. Lease rate to stay the same for entire 3 year lease, going up 10% for each 5 year option.
  11. Whatever they’re asking for per square foot, ask for $2/ft. cheaper.
  12. Lease rate to commence exactly 2 months after certificate of occupancy.
  13. All leasehold improvements incurred by you will be paid for by the landlord. These improvements will be paid back over the period of your 3 year lease, no interest.
  14. Make sure you’ve got adequate parking.
  15. If the center has display signage, you get the use of this signage from one month before opening to one month after opening… free.

Usually, they’re a little desperate after a couple years so you should have him agreeing to almost everything I’ve listed. If he agrees, this is a good deal… for you.

-J_r0kk

With two years vacancy, you might visit the planning/building dept. to view any files they have for that uint/building. Check for previous uses, applications, attempted and failed variances/permits or change of use requests. Look into the septic design as well as it might impact seating.