New commercial RE investor and need help with ...

[Jeff Simpson]

New commercial RE investor and need help figuring out how to add buildout costs to the price per square foot rent for the new tenant.

[Joel Owens]

Hi Jeff,

So you are talking retail right?

How big is the space? Is it one space in a building and if so do you own the whole building or is it free standing with just this one tenant?

What is the credit of the tenant? Is it a mom and pop, franchisee, or corporate?

TI per sq ft varies with the tenant. Corporate tenant with long term lease ( close to almost guaranteed money as you will get) then upfront TI can make sense. If it's a mom and pop usually free rent and very little TI is given in case they do not make the full term of the lease.

It's all situational. I have seen Starbucks want 40 TI a foot and then I have seen mom and pop go into an existing dark restaurant and landlord gives 2 months free rent and 5 to 10 a foot TI.