Commercial/Retail Pre-Leasing Process
Hello - we own a 3.5 acre site that we are currently trying to develop. We've already negotiated a ground lease with a tenant for 1 acre of the land subject to DD/feasibility/permits etc which is expected to take 9 months to a year.
We are trying to get the other 2.5 acres developed, either build to suit or ground lease. What I'd like to know is to see if anyone has any experience pre-leasing a site. What I don't want to have happen is to start planning and go through the permit process only to have a tenant/tenants change the entire plans and have to replan and reapply for permits.
With that in mind, I'd like to see if anyone has any experience/expertise in the pre-leasing process for retail tenants. Do you reach out to them with just the site/address or do you need permits in place for good/national tenants to take your site seriously.
Would appreciate any input.
Thanks!
James hello, you ask a lot of great questions and from reading through your past discussion threads it sounds like your well on your way to a successful development. Congrats! @Joel Owens had a ton of great input in your "To sell or not to sell..." post, maybe I can offer a local point of view.
The pre-leasing process is one I am intimately familiar with. I currently have multiple speculative development projects across the Puget Sound Region (and Colorado) in my portfolio all of which are in different stages of the process. Spec development and pre-leasing is a tricky subject and depending on your own personal goals for the property, financing and the product type can vary greatly. I would love to learn about your property and discuss my experiences at your convenience.
Disclaimer: I'm a commercial broker so i'd love to earn your business, but happy just to chat.
Development leasing is more like dancing the tango. It is a balancing act between tenant requirements/zoning requirements and city/municipality requirements! What kind of tenant do you want there? Just retail - this is easy. Restaurant - this is a little tough depending on whether the site is prime enough to attract national chains or is it just enough for local players. Single tenant NNN tenants like Family Dollar are the best. Start with zoning requirements for parking, green spaces, setbacks, stormwater drainage etc. This will give a good idea on what you can build and how big. This coupled with location will tell you the property type. Other suggestion is to talk to local developers and do a joint venture.
