Property Manager · Raleigh-Durham, NC · Member since 2015 · 43 posts · 18 votes
Hey BP. I'm living in an area of rapid residential and commercial growth. I'm eyeing several distressed commercial lots that are in close proximity of 1) a prominent neighborhood in town and 2) new build town houses that are attracting demographics that would perfectly suit placing a starbucks or Caribou Coffee. Any help with how I should analyze making offers on some of these properties/lots? Also, has anyone done land lease deal where a tenant like them builds on top and signs a 20+ year lease?
@Garrett White Best way is to get in contact with a good commercial broker that has done previous deals with SB. They're a great tenant to have because they pay high rents and draw a lot of traffic but they're very specific when it comes to picking new sites. A few things you should keep in mind:
- they usually want a drive-thru (may be an issue if there isn't one already and you need to get it entitled. Their requirements may be different in the east coast but I've done multiple in the west coast and they've always wanted a drive thru)
- they have very specific requirements when it comes to HVAC, electrical, signage, etc. (if you're planning to remodel an old building, make sure to factor these costs into your number)
- they typically won't build their own building but will do their own TI build out, which typically takes 6-8 weeks
- since they're publicly traded, they have very strict deadlines for new store openings. So as a developer, you better check and double check the dates you commit to on your lease
Garrett, I would recommend talking to a good retail broker. They will help you determine if the site would work for Starbucks and then would know exactly who to call. With that said Starbucks LOI/Leases can be tricky to navigate and a good broker will have had done several deals with them already.
@Garrett White Best way is to get in contact with a good commercial broker that has done previous deals with SB. They're a great tenant to have because they pay high rents and draw a lot of traffic but they're very specific when it comes to picking new sites. A few things you should keep in mind:
- they usually want a drive-thru (may be an issue if there isn't one already and you need to get it entitled. Their requirements may be different in the east coast but I've done multiple in the west coast and they've always wanted a drive thru)
- they have very specific requirements when it comes to HVAC, electrical, signage, etc. (if you're planning to remodel an old building, make sure to factor these costs into your number)
- they typically won't build their own building but will do their own TI build out, which typically takes 6-8 weeks
- since they're publicly traded, they have very strict deadlines for new store openings. So as a developer, you better check and double check the dates you commit to on your lease
The BEST way to get starbucks to be your tenant is to rent the area to someone that ends up having a bang up coffee biz that competes w Starbucks and takes market share. Starbucks will buy them out. Walla. ;-)
One of my brother in laws is tenant rep broker in CRE with strip, big box ... I remember him saying that Starbucks was quite difficult to deal with when it came to that world. If I remember correctly they would change they're mind even after various docs signed?
He also told me of this brand new company owned by McDs making burritos ... which I said it wont last. It was Chipotle, lol. I guess there is still time.
Hope you both are doing well. I am also looking at Starbucks for a tenant on a commercial lot. If you guys had any success or lessons learnt from your research a few years back would you mind sharing the details please.
The simple answer is, contact the real estate team at the retailer you want to bring onboard and discuss the opportunity and location with them. Finding a contact person might be a bit challenging but using something like LinkedIn or a corporate directory would help. EVERY big retailer has a real estate team.
The challenge is really coming from the fact that you don't own the property just yet so "selling" it to the retailer could be a delicate game. Best way to approach it is to find the owner and sign a purchase agreement with 90 days DD period and a contingency of you getting an approved contract from a big retailer.
One shortcut, as mentioned before, is to find the commercial brokers that have brand new constructed location for sale, identify who is the developer (the seller) and see if you can strike a deal with the developer to partner on the next deal. He can secure the retailer and do the development, you participate as the land owner and possible fund the development, everyone wins!
The simple answer is, contact the real estate team at the retailer you want to bring onboard and discuss the opportunity and location with them. Finding a contact person might be a bit challenging but using something like LinkedIn or a corporate directory would help. EVERY big retailer has a real estate team.
The challenge is really coming from the fact that you don't own the property just yet so "selling" it to the retailer could be a delicate game. Best way to approach it is to find the owner and sign a purchase agreement with 90 days DD period and a contingency of you getting an approved contract from a big retailer.
One shortcut, as mentioned before, is to find the commercial brokers that have brand new constructed location for sale, identify who is the developer (the seller) and see if you can strike a deal with the developer to partner on the next deal. He can secure the retailer and do the development, you participate as the land owner and possible fund the development, everyone wins!