All Forum Posts by: Damon DiPlacido

Alon,

What is the common thread among the 3 businesses? Were they all start-ups? Were they all the same type of business? Definitely figure out what was the problem because prospects will ask what happened to the prior tenant and you want to have  a reasonable response ready.  Do not just sit there waiting for the phone to ring - be proactive and cold-call and talk to successful existing business operators that would be a good fit. You can only squeeze so much money per square foot out of a store location, so successful brick and mortar retailers need to expand through added store count. Good luck.

Damon Di Placido

Arrow Real Estate Services

Brad - I mean this sincerely, but something does not sound right here. It would not be common for a regional sales rep or his supervisor to have any authority within a large corporation to make any real estate decisions regarding site selection, business / deal term negotiations or lease negotiations.  When you say the 'negotiations for the lease have pretty much already been agreed to..." can you provide more details on what exactly this means? Does this mean you negotiated a lease in written form or verbally agreed to the business terms?  Also many larger corporations have tenant rep brokers and a sale rep or his supervisor out in the field may not even be aware of this. As someone previously stated you can hold your ground and may lose the deal. Keep in mind many corporations are protective of their brokers. The most practical solution is to negotiate the fee and get a good tenant. 

Abbas:

I am a retail leasing broker based in Philly, and have done work with three brokerage firms in the Houston market - Retail Solutions, JLL, and The Retail Connection - and have had good experiences with all three. 

Damon Di Placido | Arrow Real Estate Services

Loopnet, Costar, Facebook, Signs, Website are all passive forms of marketing. They have their place, but you also need to implement an active marketing plan. Cold calling by phone, emailing, facebook messaging, and street canvassing at other similar shopping centers.  Many/most small business owners have a facebook page for their business - go to their page and send them a message via messenger. Don't go formal in my messages - I don't even say "To whom it may concern", rather I get right into the message - something like "If I have a space for a lease and wanted to see if it would be of interest to ABC Co., who would be the best person to speak with or to email information to?" My response rate is very high - I suspect b/c they can see your profile and tell your a real person and retail business owners are always curious to see what's out there, from my experience.  Good luck.

Greg - Based on your description of the building and the types of tenants best suited (small mom & pop independent tenants) for the property, so long as the space is in decent/good condition, the tenant should do their own fit out. That said, I would make sure the spaces are appealing to prospects, which means replace any ceiling tiles or lights needing to be replaced; clean or replace the carpet, if needed; patch any holes in drywall, if any. clean the front windows. Many mom & pop tenants are looking for 1 - 3 year leases, so don't go overboard. If you are approached by a franchise concept, most likely they will be looking for TI contribution from the landlord - they will likely do a 5 year lease with a 5 year option. Some tenants, in addition to the TI, may also have a vanilla shell work letter with certain requirements for hvac, electrical, plumbing, flooring, restrooms, gas, etc.  In return for this, they will do longer term leases (likely 10 yr initial terms). If a small, independent mom & pop is pushing for TI, most LL's first fall back position would be to provide some free rent after commencement / opening in lieu of TI.  Note, I am not defining "free rent" as the construction / fit-out period. Also, if for example, you give 2 months of free rent, add this to the back end of term so at least you get a full term from them. Also, if a prospective tenant asks about rent and TI, you don't want them to lose them on that call by telling them no; it's important to say TI may be available for qualified tenants based on tenants financials, the rent, length of term, etc. Also, let them know the rent you quoted is based on an as is delivery; depending on TI amount and length of lease term, the rent quote provide may need to be adjusted. Good luck! Damon  

Hi Andreea - Seconding what Keegan said, it does seem a bid odd the landlord would prefer a shorter initial term, but may be a valid reason. If you have an experienced tenant with a track record, then would try to push for the 5 year initial term and be paid on the 5 years now (50% at lease execution and 50% at commencement). If you're tenant is a start-up or someone with shaky financials, and the landlord will only agree to a 2 year initial lease term with the options, do try to secure it on the options then. FYI - depending on the type of property and conditions in your market, you may or may not have success with this. For example, in my market (Philly) and sector focus (retail), commissions are rarely, if ever, paid on options, extensions, expansions.

Hi Randy - 

Based on the language, I wonder if this is new construction. Please clarify. Even so, they should have a "projected" NNN figure on a per square foot basis. If it's existing construction, then they should be able to provide the current figures on a per SF basis. Also, ask them what exactly they are calling triple nets? Pro-rata share of real estate taxes, common area maintenance, and insurance. And if this is a multi-tenant building, ask them if the other tenants have NNN leases or gross leases. Thanks Damon

Hi Kyle, 
I am a retail leasing broker in the Philadelphia market....I don't know local market, but want to ask you a few questions.  Are you using the free version of Loopnet or the paid subscription version? If the free version, you are not seeing all the listings. It's not cheap, but might be worth the investment of spending a few hundred dollars a month for it, and then cancel it. Also, does your boutique fitness studio have any particular requirements that make finding the right retail space challenging? For example, high clear span ceilings? Or Potential sound or noise issues? Also, you mentioned it's tough unless you know someone. On this point, have you given any thought to having a good retail leasing broker help you? The right broker can really open doors to locations. Good luck. -Damon

I had the same question as Tom Gimer....and want to make sure I understand this correctly: 1. you indicate you already have a broker on a property you are evaluating to buy; 2. Your broker recommends you seek legal counsel regarding a legal question you had; 3. You contact an attorney for the legal matter, who then pitches you on his brokerage services on a site you are already working with a broker on. Am I reading your post correctly? If I am reading this correctly, and if I was the original broker, I would seriously question our relationship going forward.

Setting this question aside, I checked out the firm's website. They are a real estate law firm, who, it appears, has preferred relationships with brokers that they work with and farm the business out to. If you look at their website the only names you see are to the two attorneys, who based on their profiles are full time attorneys with no mention of brokerage work or expertise.  When you click on their 'Real Estate Brokerage' page, there are no broker profiles listed and they say  "...we launched Equity Realty, a real estate brokerage that works in collaboration with our law firm."

There's nothing wrong with what they are doing, but I wonder if you have a clear understanding of their business structure. 

Those are 3 good firms. One additional point...don't choose the broker based on proximity to the site. Good retail leasing firms cover a wide geography and all three of the firms you listed will cover all of northern/central NJ, drawing a line from Trenton across the state and northward.