All Forum Posts by: Damon DiPlacido

As a matter of law, there's likely no legal obligation. BUT as Joel and Wayne have suggested thinking about it from a long term business relationship standpoint, it may make sense to include the broker.  The world of commercial real estate is a small one, even in a big city. Odds are your paths will cross again and it's often not worth burning bridges in our business. 

Traditional retail is not dead - far from it - it's the boring middle of retail that's dead.  Want some real insight into retail, read articles by Steve Dennis.  https://stevenpdennis.com/2019/05/27/kohls-jc-penney-and-the-relentless-collapse-of-retails-boring-middle/

I would be curious if they have any options after the remaining 2 yr term, and if so, the # and length of the options? If they have no options to extend, you are more in the driver's seat for what happens next for if they stay or you re-tenant with better credit and/or higher rent. If they have options, what do the rent increases look like? 

I'm in the Philly suburbs. If you want my opinion on the site, feel free to get in touch. I oversee a 1m+ SF retail / shopping center portfolio in the Philadelphia MSA.

Not much additional to add other than if the property is difficult to lease, push back but don't lose the deal. 

As Ronald mentioned it's calculated on gross rent at a rate of 5.7%. Important note, some Counties in FL also impose a sales tax as well - some adding an additional 1% on top of hte 5.7%. In case you haven't figured it out - if you have a triple net lease you are paying tax (State sales tax) on a tax (real estate taxes from NNNs).  

Hi Ty - I'm a CRE broker based in the Philadelphia market as well. I focus primarily on retail and shopping center leasing, and have a 1.1m SF shopping center portfolio I oversee. Once you have some tenants, keep me in mind. My info is on my profile page. Good luck!

Frank,

$24 psf gross sounds rich for an independent dollar store, but will depend in part on the population density plus other factors previously mentioned.  Retail rule of thumb for gross occupancy cost would be 10%, so you'd need to be doing $840k in sales to support this rent. For an independent dollar store, I'd probably want to keep the GOC lower, if possible - 8.5% would give you more breathing room. Did you negotiate a 3 yr option following the initial term? 

Mason:

1. Become an ICSC member. Attend the conferences, networking events, deal making functions. You will make direct contacts here. 

2. Look up who the big retail focused brokerage firms are in your market. They typically publish a list on their websites who they rep. 

Good luck.

Damon

Hi Jeff:

I work with chain store retailers on a daily basis, and would like to ask a few questions which should help determine if you can upgrade the tenancy at your center: 

1. Are you on a busy street with other national chain retail? How is the center's visibility?

2. Is the center at or near at signalized intersection?

3. If not at a signalized intersection, is there easy left turn egress out of the center?

4. Are you prepared to deliver a space to a tenant's vanilla shell specs and potentially make a tenant allowance on top of this to the deal? Are you familiar with typical chain store deal terms?

5. How many units do you have? 3 or 4? What are each spaces sizes and dimensions?

6. How many parking spaces do you have? 

7. What is the vehicle traffic count in front of the center?

8. Is the building facade in decent condition? Is it outdated?

9. If you are thinking Starbucks for an end-cap, how much stacking for the drive-thru can you get? For 1800 sf, they'll probably need 8 car stacking. Also they'll be looking for 15-18 dedicated parking spaces.

Troy,

I don't see it as a loopnet vs. broker question. Brokers also use loopnet, but the truth is, most loopnet inquiries don't lead to a deal and often chew up time. Landlord's decisions to go with a broker or to handle the leasing in-house is often a function of how much time you have to allocate towards leasing it yourself. If you can lease it quickly, you know the market, you know how to get to restaurant decision makers locally, then it may make sense to do it yourself; however, if the leasing function cuts into your time for your primary job, then probably makes sense to outsource it.