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Commercial rental property owners, chefs, restaurateurs: break on rent when opening?

post #1 of 8
Thread Starter 

So, I'm two days shy of paying my security deposit on a wee storefront in the historical downtown area where I live. I'm moving my 2-year-old wholesale/retail bakery business out of kitchens where I stay dually employed, and into my own brick-and-mortar. Goodbye forever, sleep!


Downtown storefronts are very in-demand here, and subsequently unreasonably priced for the most part, with the landlords all having reputations for wanting to consume as much $$$ as they can while spending as close to nil as possible. It's late October now; the present tenants are leaving December 31st; the landlord has agreed to replace all linoleum flooring; all of this considered, I'm guessing I'll get into the building to start re-outfitting it halfway through January at the earliest. 


Here's my conundrum: I'd like two months, or at least one to one-and-a-half rent-free to get this place going. A previous employer/owner/baker suggested requesting three months and settling for two. I can't imagine not getting at least one. However, given the high demand of the space, I'm worried this will be used as unfair leverage against my request. I'm sure many of you have already been in my shoes, and I'm looking for:


your thoughts about how reasonable a two-month rent break is?

suggestions as to how to approach the topic with the landlord?

how to reinforce the validity of my request should the landlord immediately say no?

thoughts on whether you would consider a refusal a dealbreaker? would this be a red flag for you?

winter killed us in this area last year; there's a good chance this year will be the same; should this even be brought up regarding the accessibility of the space during the time i am moving in, or should this be considered irrelevant?

thoughts on signing a lease while there is still an operating business inside the building for two months vs. waiting until the business has exited and a walkthrough can be done? the property could be in completely different shape in two months, no?




When is bringing someone with you to a lease/security deposit/commercial rental opportunity considered appropriate? My boyfriend happens to be my contractor/painter/investor/future-employee and I would like to include him in the discussion, as I feel his input could be vital to negotiating our needs. Appropriate? Inappropriate?


All of your thoughts, tips, suggestions would be so so appreciated. I'm pretty sharp, and I'm very articulate, but sometimes I get weak treading water in business negotiations, and I could really use some factual and experience-driven reinforcement.


Thank you to everyone in advance for your input.

post #2 of 8

Bring whomever you want with you to your meeting with the landlord, thoroughly investigate the property, get everything in writing to your satisfaction BEFORE you sign anything. Negotiating two or three months free rent on a start up is not uncommon, if the rent is $$$, if your talking a few hundred, then not so much.

post #3 of 8

I heard once that the best negotiating position to be in is the ability to walk away. Showing too much interest gives leverage to the other side.

      A big concern for me is insurance and maintenance. Who pays for what? Does the landlords building insurance pay for your business? Does your business insurance pay for damage to the building?  We had a local, much publicized dispute over the end result of a fire. Landlord had one claim, tenant had another based on insurance issues. Both made assumptions before contract signing and no one checked to see policies or checked with the insurance companies for clarification. 

If you need to make structural/physical improvements to the space as your business grows and your needs change, will you pay for all of it? 

(Example from real life-Health department decides in third year of business that you need another hand sink where no plumbing exists. New pipe will have to be run and equipment relocated. Fairly big and costly job.  Who pays?)

I would wait for the walk through before signing. Should the current business owners leave with equipment the landlord claims does not belong to them, leaves unexpected damage or otherwise leave behind one issue or another, there may be need for further negotiations. 

Can you use the space as is or will costly improvements need to be invested in?  My partners and I walked away from a rental once because the owner had an office upstairs and wanted the existing exhaust rebuilt to go five floors higher. 

     Contracts can be built on whatever you want to include in them as long as both parties agree to it. There will

most likely be issues one or both of you think are obvious. Be sure to state them clearly so you both know what obvious is. 

Oh, yes, bring the boyfriend. Always good to have a second set of eyes. 

As Chefbuba said, get it in writing before you sign. 

To state my first point differently, as good as it is, this isn't the only potential spot in town. don't be afraid to walk away if need be. 

post #4 of 8

@Alisha Nicole,

All of the advice so far is spot on. I think your boyfriend/investor can really help. He should be able to put together some numbers for you on your finish out. They don't have to be exact, the landlord is not the bank. Identify any lease hold improvements that you will make to benefit the LL. Ask for what you realistically want and add some. Depending on your finish out 3 mths is not uncommon. I would'nt mention that the winter may be thin, the LL does not want to hear this.

I have been in one of the post prestigious rent areas for 20 yrs. When I could not come to terms with the first two places I actually went home and cried. I had done traffic studies, demographic studies, the whole nine yards. The LL wouldn't budge. One place had a 3 ton A/C unit that would not be sufficient and the LL wouldn't budge. I was not going to pay for his lease hold improvement that I couldn't take with me even though.

  YOU MUST enter the agreement with the intention of helping the LL not the other way around. You will have a nice place and he/she won't have to worry about the rent coming in like now.

crap GTG

Edited by panini - 10/25/14 at 11:59am
post #5 of 8

What Pan and Chefwriter said... and what you said about landlords...


1) You can only negotiate before you sign anything. If you are able to walk away from any deposits or lease obligations now, you might have some "wriggle room".


2) What you said about landlords. Yes they are greedy s.o.b.'s, yes they will cut your throat if you let them. Now I want you to have some empathy for them--NOT sympathy.  They (LL's) are running a business too, and they have mortgages and property taxes to pay, they need to generate an income.  With me so far?


If you go to the LL and say "I'm willing to put in $10,000.00 worth of lease-hold improvements (NOT equipment, but wiring, plumbing, gas or other )" Then you have negotiation power.  You are improving thier property, which they will use to their advantage when re-negotiating your lease or with new tenants.  They'll probably give you a break on rent for X months.


If you whine, beg and hassle for a break on rent and you get it without offering anyting, they will want to reclaim that amount.  They'll do this with a shorter lease--once you are set up and have a customer base established, it's hard to move again; or get you somehow to pay for building upgrades or repairs in the future. 


So that's the way it is.  You can say all you want about indie landlords, but the real devils--the ones who have a special room reserved for them in hell when they die--are the shopping malls.  For these devils will not only tie your rent to your monthly sales, not only will they claim any equipment or fixtures you installed in your unit should you leave, not only will they reserve the right to move your store to a different location (behind the pillar next to the washrooms) should your monthly sales not meet their quota--- but, BUT, get this, they'll will want a percentage of your monthly sales, and INSIST on using their cash registers and computer programs AND contribute to yearly advertising promotions.



It's a nasty cruel world out there.......  

...."This whole reality thing is really not what I expected it would be"......
...."This whole reality thing is really not what I expected it would be"......
post #6 of 8
Thread Starter 

Thank you everyone for your input. 


The most I'm looking at investing is a little structural reinforcement (there are some spots in the walls that need more than a sand and a paint, there's a narrow set of stairs leading upstairs that i want fortified, probably replacing and reinforcing some parts, and focusing on ensuring the place is better insulated, which may include one or two new doors), and possibly running one more line of electrical to outfit another oven downstairs. 


My plan is to present this to him as leverage in the rent break. I don't just want "free rent" because that's the "standard;" there are specific things, that cost money, that I want to do to ensure the security and quality of the space, which I think would benefit us both. My hopes are that we can reach an understanding based on this. I think, I'm not paying you cash money rent, BUT i'm still spending money to invest in the quality of your space, which will still be yours whether or not I'm occupying it.


@chefwriter i'm glad you brought up insurance and maintenance. it's not that it's something i hadn't thought about, but i may have overlooked having it in writing that if a pipe explodes, the landlord should be in charge of maintaining the structural integrity of his property. 


@panini don't take this the wrong way, but i feel so much better hearing that you went home and cried. this process can be so doubt-incurring and sometimes-deadening, that's exactly how i feel. i have to remind myself that no matter what, it's not the end of the world or the end of my prospects.


@chefbuba the rent is definitely more than a few hundred; it's pretty high considering the square footage, but it's within my budget cap and in the right location. a month and a half, even, would be a world of change in regard to what i can afford to spend on reinforcing the space.


@foodpump nasty and cruel indeed. there's another out-of-the-box and out-of-the-freezer bakery in town, and the owner already has it out for me. i was properly licensed and legally outfitted to sell baked goods at a pop-up at a nearby coffee shop, and she literally called the police on me. gotta love small towns.


thank you all so, so much for your help and insight. last question:


i'm going to meet with the landlord today. how do i go about suggesting a lease change (to include insurance responsibilities regarding the building's theoretical future infrastructural issues and time given to flesh out the interior less the rent), prior to signage and payment? in a magical perfect world, where we meet in agreement on these issues, write these things into the lease on the spot? ask the landlord to adjust the lease and meet for a check-writing as soon as it is revised? 

post #7 of 8

@Alisha Nicole,

First, good luck today!! I just want to impart this. The landlord is no different than you. Maybe your first lease, but don't let him aware of that. You are a business owner as he. This is

a business deal. With that said, most LL just carry ins on the 4 walls. He is not concerned with painting, doors, electrical needs, insulation, you're renting what you see. The structural issue of the stairs

might be on him. If you're not comfortable signing today, use it as a tool to buy some time. Say you would like to get an estimate on the repair of the steps because you don't know if your ins. will cover any accident there. I'm not sure where you are so this may be different.

I would not worry about making inked in changes to the lease as long as you both sign every change above and beyond the lease signing.

Please, don't forget, both you and the LL want this. I'm a firm believer in negotiation. If you really feely you want six week for your finish out, ask for 12 and negotiate down. It's part of business.

NEVER feel pressured to sign anything that might come back to bite you. Especially when you hear things like "I've got 2 people just waiting to get this space" That's the art of negotiation.

Fate will play a big part in this, if it was meant to be it will happen. Deep breaths and carry yourself like you doing the LL a favor.

The very best luck today!!!!! You sound ready to do this.please keep us posted


post #8 of 8
Thread Starter 

To everyone who offered input on this post:


Thank you!



Update: I'm picking up keys soon to my brick and mortar storefront. The landlord is currently fixing the place up and I signed a very fair, reasonably priced, year-long lease.


Sometimes I'm paralyzed by the anxiety of all that is left to be done, but mostly I'm optimistic. And relieved knowing that I have such a reliable resource in the forums at Cheftalk.


Thank you, everyone.


Pastry FTW. Let's do this, universe!!

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