How to advertise to restaurant owners within a certain radius ?

Question

I recently purchased a 3 story commercial building right in a downtown area. The city is looking to attract a restaurant/brewery to the first level of this building and I am trying to accommodate because they gave me a 30K rehab grant for the building.

I was thinking of direct mailing or somehow marketing to all the restaurant owners within a certain radius in hope they will want to move locations or expand in addition to our regular marketing of the building.

What is the best way to achieve this?

Joel Owens · Answer

Just like residential do not take the first tenant that comes along just to generate cash flow. In commercial you need to be selective. I would rather wait 6 months to 1 year for the right tenant to go in then have a mediocre one that may or may not make it and the cash flow in the beginning is now wiped out and then some by having to redo all of this stuff and pay costs again to land another tenant.

It's just like residential. If a good tenant stays and pays you tend to make money. If your investment property becomes a revolving door for tenants that did not work out the odds are high you lose money over time.

Landing a commercial tenant can be a full time job. I put in the cost of a commercial leasing brokers services when I buy property as a cost of doing business. I do not have time to chase after good tenants and have discussion after discussion to reel them in and go through microscopic steps to a signed lease. That is what the leasing broker is paid to do the heavy lifting part of that. Their job is too perform a void analysis and see what highest and best use is for the space and WHO is expanding in the area for additional locations or opening up first locations in that state.

Brett Radi · Answer

Is it a historic building? Guessing it is since the city gave you a rehab grant.  I would contact the local news station and have them do a story on how you are revitalizing the building and you have visions of a restaurant or brew pub going into that space and sell the vision and the dream.  People will come out of the woodwork.  Also if you have good road front visibility, a sign stating restaurant/brew pub space for lease.  Up to you how much TI and all of that you are willing to do to actually make it a restaurant.  Also, might try reaching out to regional chains pitching the space to them as you would a bank. I.E. traffic count/pedestrian activity, proximity to maybe colleges, business, places that draw a lot of people(stadiums, concert venues), uniqueness of the building or what makes it special or some place they would want to have a restaurant.  Just a one page sheet highlighting these things.

John M. · Answer

sounds like you are on the right track.  I did some direct mail, but didn't have any luck.  I had more luck with contacting local brokers as they are in the know of who is expanding.

Adam Craig · Answer

Great insight. I am relatively new to commercial real estate with 4 buildings under my belt in 3 years. So I am learning as I go and would love you to critique what I am about to say.In my 8 years of residential single family rentals I had 3 different property managers early on and non of them did a good job, at all. At some point around 2018, my involvement in my real estate business went from part time to nearly full time. I do not have a day job, just another business I own and I split my time up rough 80/20 (real estate/other).This is when I decided to ditch my PM and self manage (with my wifes help). Since then, I am getting much higher rents, filling units quicker, and tenants are getting work orders resolved faster and for less. Not to mention saving 30-40k a year in fees. My goal is not to self manage much longer since I am approaching 65 doors. I want to bring on a part time employee to work in house as the PM in addition to other tasks. Not only to save money, but to have better control over things unlike when I hired out property management companies and I was just a drop in the bucket.So far, I have taken this same approach to commercial real estate. I see SO many vacant units around my buildings that stay vacant, but we are able to fill our spaces up much quicker. The only thing I can think of is that I work much harder at finding tenants then a PM with dozens and dozens of properties. Know one is going to care about my properties/tenants the same way I do and I understand that. And for me to pay them a hefty fee to do a lesser job does not sit well with me. I feel I can train a part time employee who can nearly work from home to do a better job for less in the near future.Thoughts on this?

How to advertise to restaurant owners within a certain radius ?

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