HELP! Chicken or the Egg -Retail Strip /Ground Lease, Need Advice

[Shay Reddy]

I have acquired a parcel on a hard corner with a traffic light and some good development around it

We are tentatively approved for a 2.4-acre parcel / 16000 square-foot Strip Center. I am in a chicken and egg situation where we need to spend money to develop the site plan, architecture and get some prospective tenants in place before we can get the loan to develop the property. the corner is also good for a Walgreens or any anchor store.  Google pin https://goo.gl/maps/XxPH7KYwqQ...

We were advised do you use a developer who knows the area who knows the system and ultimately charges 3.5% on the overall project cost which to me did not sound too unreasonable estimates on the project at around $250/sft to bring the project cost 2 around 3.5 - 4 million dollars. We may build and hold or leverage/ refinance  or sale.We are open to ground lease they are open to pretty much any scenario. 

The BiggerPockets Community has been invaluably helpful thanks in anticipation

The ASK

1. I am looking for any and all advice and building my first Strip Center.
2. As this is our first commercial project do you advise using a developer at 3.5% project cost ?
3. Can anyone provide information on a ground lease it seems like a good option as well?
4. Should we be contacting Brokers directly it appears that they want to get into a marriage and exclusively Market the property ?
5. It's a great location for a Starbucks and any other hard corner buildings QSR etc
6. we feel that if we can get a first decent deal it would be able to manage Phase 2 and phase 3 of this project a lot better and with some experience

Any advice is appreciated.

[Jan Kerr]

All of those big name anchor stores you mentioned and many more have special departments who deal with new location selection. Contact their corporate offices and get the nemaes of those people and start a conversation. Do this after you have prepared a nice persentaiton for them all about the surrounding retail and consumer draw that is already in place as well as all of the statisitics you can find about population and demographics. Also show them if they have any competition in the area, who it is and where they are in relation ship to your parcel and the majority of the population/housing. Good luck! 

I have an uncle who bought a parcel that already had a contract to lease it to a Sonic Fast Food Restaurant Franchisee for 20 years with a lease for $8,000 per month. They demolished an old Wendy's restaurant on the site and re-built it to suit their needs all at their own cost. I was woorried about it when he did it becasue Sonic had a lot of store closings in the area at that time, but surprisingly, they are doing well enough and he gets paid every month on time so far.