The elusive search for commercial kitchen space

I unconsciously made the commitment to open this business when I created the web site. It showed up in Google and Yahoo just after it was posted by my designer. I was so excited to see it hit the top of the list when I googled 'commercial kitchen sacramento'. I started getting email and phone calls even though it said I wasn't open. This is just what I needed and I didn't even know it.

Should be easy, right? Find some restaurant that was for lease, make the improvements and then go. That was last October. I had wanted to be open for the Christmas season. It is now February. Right now I'll be thrilled to open for wedding season.

I started my search using the Internet, looking for commercial restaurant space for lease. There are lots and lots of businesses that want you to buy the Business including their clients and books. Fine, but I didn't want their Business. I wanted their building. I found a site called LoopNet that had properties listed. A merchant I worked with in Elk Grove gave me the name of a man who was a commercial property agent. I called him and gave him my requirements. I wanted about 1,000 sq. feet of a restaurant in the Del Paso area of Sacramento. It is right at the confluence of two freeways and would give easy access to Roseville, Elk Grove and Folsom which are the larger cities that have caterers.

The guy called back 2 weeks later with a building for me to look at. It was a little bigger than what I wanted (5,000 sq ft!) but was a former bakery and had equipment. The place was gigantic. The ceilings were so high I felt dwarfed. In addition, the place had 3 walk in refrigerators, one walk in freezer and about 30 regular refrigerators. The equipment was old and dirty. The plumbing lines between the sinks were held up with wire. The prior tennant had just walked out one day. There were bowls of flour on the counters and clothes in some of the rooms. Nope, wouldn't work for me.

I then talked to another agent who came highly recommended from other real estate people. Zack was much more responsive and I started down the road to learning about commercial real estate. First, there is no MLS for commercial real estate, at least here in Sacramento. Zack did a blanket email to all his contacts stating what I was looking for. He got a couple calls but mostly for buildings that were under construction. I learned the deadly and unfair world of NNN - triple net. It means the tenant pays for the landlord's insurance, building maintenance, taxes, garbage, sewer fees and whatever else they can squeeze out of you. The lease rate is just a teaser. You think you are getting a good deal - $1.25 sq. ft but tack on a NNN of $.40/sq ft. and you are paying a much higher rent. This is common. So, in my next life I want to be a landlord so I can own a building and pay nothing except the mortgage.

Since there is no MLS I was frequently reduced to driving up and down streets in my area to see if For Lease signs were in the window. Zack did it too. I would hear about places for lease and then the landlord wouldn't want my business there. They generally wanted someone who was going to open a restaurant. Some of them had such decrepit places that it scared me to think of opening a clean kitchen there.

Then a little sandwich shop came up for lease. It was in an OK area and I cruised it then called Zack. It was small but might work. The leasing agent came to show us the inside but the lock fell off in his hand when he inserted the key. Not good.. However, the agent had another place to show us. It turned out to be across the street from where I work so that was exciting. It was also brand new and just a shell so I could configure it like I wanted. A shell means the place has no walls, no ceiling, no nothing except the 4 exterior walls. The space was much larger than I wanted - 2500 sq ft. but it was built for a restaurant and the landlord was going to give me $50/sq. ft. for tenant improvements TI). TIs are funds the landlord gives you to customize your space. Sounded good to me and Zack. I had a builder come do a rough estimated of the build out and in the mean time got a meeting set up with the landlord of the space.

next installment..initial meetings and negotiations..