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[binki]

We were looking at setting up shop in a bigger location. Guess what? We were offered free rent for 6 months today. Yes, Free, with a 5 year lease. Free, no payments, no down, no other commitment other than a lease. And, that is the starting point for negotiation. The broker even discounted the space by 30% from the asking price for starters.

Here is the best part, The place had an embroidery and screen printing shop in it and they skipped out. There is already a very nice sign on the building and it has great visibility!

But wait! It gets even better! The business there was for sale a few years ago and we got a look at their books so we know what kind of revenue the place can generate.

If anyone here is currently leasing, you should be in re-negotiation on your space. If you are working out of the house then you are already in the drivers seat!

So, how about a subject board on Space Lease/Rent/Purchase ?

[badablue]

We were looking at setting up shop in a bigger location. Guess what? We were offered free rent for 6 months today. Yes, Free, with a 5 year lease. Free, no payments, no down, no other commitment other than a lease. And, that is the starting point for negotiation. The broker even discounted the space by 30% from the asking price for starters.

Here is the best part, The place had an embroidery and screen printing shop in it and they skipped out. There is already a very nice sign on the building and it has great visibility!

But wait! It gets even better! The business there was for sale a few years ago and we got a look at their books so we know what kind of revenue the place can generate.

If anyone here is currently leasing, you should be in re-negotiation on your space. If you are working out of the house then you are already in the drivers seat!

So, how about a subject board on Space Lease/Rent/Purchase ?

It would make a nice poll as to who works out of the home and those here that have a storefront. Sounds like a nice deal Fred..

[binki]

We started looking for space when a 12 head tajima came up for sale down the road. We didn't buy it but we did look at property and got a good idea of what was out there.

I just happened to be driving by this location and saw it was empty. We are in negotiations now. Will see if it works.

[MonkeyMeMe]

Brick and Mortor Store Here...
But I have duplicate machines at home , so i can work at home as well.
Here is a pic

[binki]

We just sent in our offer, no deposit, 6 months free rent and 6 months half rent, 92c/sqft + cam 60 months. we will see. We will need to be at $40K+ a month to make it work by the end of the first year.

[FatDad]

We just sent in our offer, no deposit, 6 months free rent and 6 months half rent, 92c/sqft + cam 60 months. we will see. We will need to be at $40K+ a month to make it work by the end of the first year.

wow if i could even do a tenth of that a month i would be happy.  GREAT JOB!!!

[binki]

Well, we have gone back and forth and down to the last offer. We rejected a counter offer and will hold ours out until tomorrow. After that we are done with these guys. We conceeded $10K over a 5 year period. We are $1100 apart on the move in plus carpet for the office space.

[MonkeyMeMe]

Hey Dad good to see ya
MMM

[proworlded]

I am believer that you get what you pay for. There are plenty of empty stores around these days that the owners are willing to make very low offers to get them rented. I would want to know why the previous rentor 'skipped out' if the location is so good. 40K a month is a healthy volume to accomplish in a stand alone (non shopping center) location. Is this a 7 day operation? How much foot traffic is there? Available parking? Have you spoken to the neighboring businesses? There are lots of questions that need to be answered when opening a new business is these tough economic times.

[binki]

The previous biz was a screen print and embroidery biz. It was for sale several years ago and we looked at buying it. We found out the owner was running his personal expenses through it and taking cash payments from customers and putting them in his pocket. At the time he was grossing $350K/yr at that location. He skipped out and opened up about 20 miles away.

The location is on a busy street and is street facing with great visibility. There is already a nice sign that is visible for over a block away coming from either direction. There is also a dock high rollup door in the back. There are 4 street facing units that are leased, the buildings behind it are all owned by individual unit. The property has common parking and entrances. For all purposes the park looks like 4 retail stores connected and then an industrial park behind it. You would never even know there is anything back there if you didn't go back to look.

We were planning on having Tue-Sat retail hours and full time outside sales.

There is another embroidery shop in a building behind this one but we were told he has sold his unit and is moving. Down the street there are 2 sign shops but one has moved.

The market in this business is saturated but no single player even has 1% of the market. A good sales person in Southern California can generate $100K-$200K/month in gross sales in screen printing and embroidery. I know this from the businesses like that that have been for sale over the last few years. I don't think $40K/month is unrealistic.

As for the cost of the space, it doesn't get any better than it is now. Retail space around here was over $2/ft two years ago. It is approaching $1/ft now. Commericial/Industrial space is below $1. Many places are offering free rent as well.

[proworlded]

Sounds like you've done your homework and have a good business plan. I wish you great success.

[MonkeyMeMe]

I am a landlord and rent to business's as well as everything else i do,, for the landlord to offer free rent for 6 mo and 1/2 rent for 6 months, is something I could never do, with all my taxes and heat /aircond prices rising,, this sounds a lil fishy to me,,
I would get everything in writng and have a real estate attorney look at the lease and make sure you are protected in case the landlord goes bankrupt,, and you come to work one day and are locked out,, also go to the city to make sure that hasnt been forclosure papers in the works,,
If none of this, has come into play,, and you have the equip, and energy to work and have a crew to work, to make that kind of money, sign those papers and get going,, you are getting a heck of a deal,,,, grab it before it gets away, but do your homework,,Great luck to you
MMM

[binki]

Thanks for the info.

A lot of places here are offering free rent to move in. Some parks are 50%-90% empty. Even the owner occupied parks are hurting as the owners are just walking.

[MonkeyMeMe]

Please keep us informed on what you decide to do,,
I wish you luck
MMM

[binki]

Well we got a deal on our lease. Woot! The best part is a great big sign out front that aleady says screen printing and embroidery. That will save a few thousand.

We purchased the firedog counter area at a local circuit city for $300 saving us another few hundred in FFE. We will pick up some other liquidation items for the store. Too bad Mervyns still isn't going out of business. They had a lot of nice stuff for next to nothing.

We just purchased a cutter to do some minor work with 1&2 color shirts as well as picking up production of our car magnet sales for cut vinyl.

We have just finished replacing our ink delivery system on our DTG.

Now, to generate sales....and moving all this stuff to the new place.

[MonkeyMeMe]

binki, I am very happy for you, it sounds amazing,,
MMM

[binki]

Thanks for the kind words. I will see if I can go back and document the process so others might benefit.

[fivestar]

Congrats binki.  I hope you exceed your goals.

[binki]

I think the most important factor in the negotiations was that I was willing to walk on the deal. When we were only $1100 apart I was asked if we would let the deal fall apart over a thousand bucks. My answer was to ask that question back at the leasing agent, was the owner willing to do the same? He is fortunate in that many of his tenants own their units so he is still collecting the CAM from them. His rentals, however, are 50% vacant which is better than most parks around him. Some are 100% vacant and others are very close to that.

There is so much commercial and retail space that is empty right now and the next year is going to be very tough for everyone around here. If we can make it through this year we should be ok. At some point there will be pent up demand and things will turn around. Until then we will have to make our own luck.

This is the worst economic period of my lifetime but some type of downturn was to be expected. It happens every 10 years or so, sometimes more often. While I wouldn't call it a boom/bust cycle I would call it a somewhat predictable cycle.

I think adding the retail exposure for us is a good thing. That is our highest margin sales and it will lead to more opportunities for us.

[binki]

ugh, what a painful process this is. still working out fine details. every step of the way changes are slipped in and we have to pound them out.