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Old 16th March 2012, 06:49 PM   #1
Long O
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Join Date: Mar 2012
Posts: 2
Default Opening A Retail Store And Need Your Advice!

Hello,

I want to open a retail store in a strip mall. I plan on lowballing the rent because alot of stores have closed and the strip (while in a great location) has just had open spaces for a while now.

I'm new to the whole negotiation thing but a friend who is quite good at it told me go in with money in hand. I plan on following his advice. I plan on signing a 3 year lease and paying the forst year at signing to get a low low rate.

Now my question. I have been learning about NNN, NN and most of the needed information to make this work out. But, I know alot of landlords will take a percentage of your monthly/yearly sales as a stipulation to your lease.

What is the average accepted percentage? I know it would be based on sales, and I anticipate doing about 45-65K in my first year.

Any advice from you pros?

Thanks,

LONG

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Old 17th March 2012, 10:23 AM   #2
AngelBiz
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Join Date: May 2010
Location: Detroit, MI
Posts: 575
Default

Quote:
Originally Posted by Long O View Post
Hello,

I want to open a retail store in a strip mall. I plan on lowballing the rent because alot of stores have closed and the strip (while in a great location) has just had open spaces for a while now.

I'm new to the whole negotiation thing but a friend who is quite good at it told me go in with money in hand. I plan on following his advice. I plan on signing a 3 year lease and paying the forst year at signing to get a low low rate.

Now my question. I have been learning about NNN, NN and most of the needed information to make this work out. But, I know alot of landlords will take a percentage of your monthly/yearly sales as a stipulation to your lease.

What is the average accepted percentage? I know it would be based on sales, and I anticipate doing about 45-65K in my first year.

Any advice from you pros?

Thanks,

LONG
I wouldn't advice you to go with money in your hand and paying the first year rent upfront. You are going to needs all the money you have to pay for numerous items when opening the business. You don't want to run short on other items. If there are number of open spaces in the strip mall the landlord will be willing to negotiate and give you a break regardless. Besides, you don't want to sign the papers on the spot without looking over the details of the lease and discussing with someone who is knowledgeable, preferably a lawyer.

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Old 20th March 2012, 08:50 PM   #3
Long O
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I understand what you mean. Thank you for responding btw. I think I will get a lower monthly rent if I bring big commitment to the table. But the real question I have is How much is average when it come to a landlord/Leasing company to require a percentage if any?

I know alot of place require you to report your sales, but what kinda results come from this?

Thanks

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Old 21st March 2012, 06:38 AM   #4
Logan
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Originally Posted by Long O View Post
How much is average when it come to a landlord/Leasing company to require a percentage if any?
I think giving an average is tough to provide you. If I had to it would be around 5% of gross sales. That may be too high or low though. You and the landlord need to consider what projected sales are going to be so you are considering real cost vs percentage. Also what is the landlord doing? Some help promote the shopping center and the percentage goes to a marketing budget for this, others do nothing.

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