How bad is Retail doing?!? 5 years FREE RENT!

[Andrew Jones]

I just saw this sign while I was shopping in a nice retail area in Burbank, CA last month and couldn't help but take a picture and post it here. Can this be correct 5 years free! I am assuming they must be requiring a 25 year lease agreement or something. Is this common?

[Joel Owens]

Terms and conditions apply.

Nothing is FREE. The cost is built in somewhere to what they are doing.

We get landlords offering free rent here for 1 year.The rent isn't free on commercial as they then have year 2 at a higher than normal rate to recover some of the lost rent and then built in escalations that are higher and more frequent than normal.

Never get sucked in by a gimmick.I tell all my clients to be slow and methodical in doing a deal to avoid "knee jerk" reactions.It takes a long time to make money and a small amount of time to lose it.

You also have to watch out for if they are in pre-foreclosure or not.They could be trying to collect an upfront payment with free rent and then walk.