All Forum Posts by: Damon DiPlacido

Charlie,

It's important to distinguish 'abandoned' from 'vacant.' An empty retail box may be unoccupied for a long period of time, and to the general public it may look as if it's abandoned, but often the deals to fill these spaces can take a long time to complete. Also, once the deal is signed, it could take 120 - 180 days to just begin construction. A lot of things can be happening behind the scenes on these spaces without the general public realizing it. 

As far as finding empty boxes for sale, you should join the ICSC and then attend the conferences and networking events.  Good luck. 

I stand by my statement, and based on the few details provided here, it's more than just likely this space would not be a fit for a national restaurant tenant (either as franchisee or corporate signed deal). $1 psf/mo NNN ($12 psf/yr) NNN speaks volumes about the location from a national restaurant chain perspective.

It's hard for me to gauge what you should charge, as 1. most, if not all, the restaurant deals (20+ over the last 2 years) I do that involve a patio there's no additional charge for use of the patio, and 2. I don't know your market.  There's no exact science to it but like you said it's only usable about half the year (due to temperature, I presume) and then even when the weather is warm, it could be raining, so truly only available likely somewhat less than half the year - maybe an extra $0.15 - $0.20 psf/mo added to the $1 psf/mo sounds reasonable. Also on whether to retain the tenant or get a new one, it's almost always in your best interest to retain a tenant once you factor in loss of income b/c of vacancy period and then construction period for new tenant), legal fees, broker fees, etc. 

From my experience, unless the space is in very high demand in A+ type real estate, the patio is available for tenant's use at no additional charge. Likely an easier "sell" to raise the base rate PSF on the 1,623 SF ever so slightly to include use of the patio. 

Hi Gita,

Here's one more....she's based in Doylestown: 

Kellie A. McGowan, Esquire 

Eastburn and Gray, PC

60 East Court Street | PO Box 1389 

Doylestown, PA 18901

Tactix is a good firm, however, they are office brokers focusing mostly on legal and healthcare sector. 

In good to better shopping centers, e.g. well positioned un-anchored strip centers with chain store tenants or strong grocery anchored centers, it's very common.  For mom & pop tenants, the landlords will not typically waive these pass-through expenses all together, however, you may be able to limit the impact of the increases. Many strip centers with only mom & pop tenants may often be gross leases where the pass-through expenses are not broken out separately for the tenant. 

Regarding your insurance question, the pro-rata insurance is property insurance, which is separate from the policy your tenant will have, which is for contents. 

Amin,

I'm a tenant rep broker in the Philadelphia MSA with a heavy focus on tenant rep restaurant work. If you already have a location and the landlord has provided you a lease draft, at this point you need counsel from a real estate attorney (a broker cannot provide legal advice).  Be sure to hire an attorney with solid transaction experience with a focus on retail leasing - it will make a difference. Also, if you want input on the location or area I'm happy to do so - my email address is on my profile page.

Thanks
Damon

I oversee a ~1.4 million SF shopping center / retail portfolio and from my experience here are some things I see that may help increase your odds of landing a higher quality tenant beyond the basic demographics (income, population density, etc):

1.  Physical location: Position of the center on the street. Is center mid-block or at a hard-corner of signalized intersection? Is the strip center parallel or perpendicular to the road? If perpendicular do the storefronts face towards oncoming traffic or away? These last 2 questions defy logic in my mind, but some developers have built strip centers this way. 

2. Co-tenants: Who else is there? Chain store retailers are like sheep, and they do follow one another as many retailers have good synergies with one another.  As you have all mom & pop tenants you may need to sacrifice a little more on the first deal to open up the door for other potential deals. 

3.  Physical condition: Beyond repairing any obvious visible physical defects, a fresh coat of paint, new striping in the parking field, and some basic landscaping improvements. Even if the center is all concrete, adding some planter boxes with flowers on the side walk will go a long way towards curb appeal. 

4. ICSC: Join the ICSC, attend the ICSC trade shows and deal making events, make marketing materials geared towards retailers and retail tenant rep brokers. If you don't have the time for this, then hire a broker that does this.

4. Be a "Deal Maker": Know the terms of a retail / shopping center LOI inside and out, know what higher quality tenants look for, and know what you need to hold firm on and can bend on.

5. Be broker friendly: Most chain stores have strong relationships with tenant rep brokers. Have an understanding of CRE commissions and how to structure them appropriately.

Is the strip center in SWFL, where you are located? If so, then official demographics may not tell the full story as the seasonal population swells during 'snowbird season.'  What's the traffic count on the street?