Restauarant and Retail - LOIs, TIs, Variances, and Leases
Hey can someone give me general advice on retail/ Restaurant Leasing. Building Located in Los Angeles County.
I purchased a value-ad mixed use with retail/ with goal: to maximize value to property.. Possibly refi in 2 years or sell in 2-5 years after property is stabilized. I want to maximize the rent/ appraised value.
I have been marketing a retail space to lease to restaurants and have a few interested parties. There is no existing infrastructure for restaurant, and the space is in need of major repair. A normal retail space in this building might only require $10-20k in improvements to bring it's standards up, where a restaurant would require $60-200k in upgrades to meet restaurant standards.
One restaurant is interested in doing a $250k buildout (I may have to contribute another $20-40k to fix up the space's shell -plumbing/wall repair)
They are requesting $40k TI and 4 months free rent during buildout period.
It's approximately 1700 sf and they want $2/ sf/mo NNN(I'm pushing for $2.75/sf NNN)
Do you think this is reasonable? In this area, turnkey rents are around $3-3.50/sf/m, and $3-4/sf/m in better areas.
Any tips or general advice for a landlord?
General advice for pushing the most value for property in this lease/ build out. What is expected in general for a retail space requiring a full build out to bring it to restaurant?