All Forum Posts by: Chris Anderson

If the restaurant is occupied and doing well financially I wouldn't switch it.  Chances are you have a hood for that restaurant.  If the tenant ever moves out just know that second generation restaurants are very valuable because a new restaurant owner can come in with very little capital and get their concept going. You wouldn't have to pay a lot of TI in that scenario.  I've been through this before so I speak from experience.  Depending on the equipment, the area, and the sales figures, sometimes you already have the best use.  As far as rents you would have to do research on what others are paying in that area.  The rent is not solely based on industry type rather than what does the local market support. Whatever you decide to do make sure it's a triple net lease.  Good Luck!

Most lenders will understand a GP/LP structure.  You will want to make sure you have a solid operating agreement and PPM in place to show the bank.  You could also look at offering additional GP equity to one of your LP's if the bank needs additional guarantors to secure the note.

@Chris Anderson If you are working with lenders who understand syndication, they won't be looking at that unless an LP owns majority or over 20-25%. If you are working with more residentials banks or smaller banks not used to syndication you'll face issues. 

My suggestion with smaller banks with JVs, Syndication, LLC partnerships, etc. is create your entity and basic op agreement first with only 1-2 owners, then open your bank accounts and loans. You can avoid much of the hassle by then changing the op agreement and adding LPs after the fact. Of course this must be done before anyone signs your PPM. In some states you will need to notify the state of ownership changes.

Again, to avoid issues or risk however, ensure no LPs have majority share or simple work with lenders who understand syndication. Also get legal counsel familiar with this topic.