Renting to Starbucks, dunkin donuts

26 Replies

Any one a land lord to Starbucks I’m trying to get them in my building and it seems I’m getting blowed off even had my county commissioners attorney write letters to them. Any advice will be awesome. Thanks

I have a question, while on your property look down both sides of the road. Do you see any lots that are empty or vacant? If yes, think of this... Why sign a lease with you when they can buy the land for X (I'll assume it will be cheap if there are a few lots available) build a new store for let's say 1mm. Sign a 20 year land lease, then sell the property for $4mm.

They KNOW that a dump of a lot becomes a gold mine when they enter. Now if you are in a major populated area and no available lots, then you are on a reasonable quest. Please share with me if and how you nailed them.

Originally posted by @Patrick DeGarmo :

Any one a land lord to Starbucks I’m trying to get them in my building and it seems I’m getting blowed off even had my county commissioners attorney write letters to them. Any advice will be awesome. Thanks

They have very specific location demographic requirements. They will not go just anywhere.

Starbucks is corporate so you need to go to their real estate Dept. You can find it on their website and submit your site.

Duncan’s are franchised in most areas so you need to go directly to the franchisee and they have to submit to corporate.


 

Originally posted by @Gaspare U. :

I have a question, while on your property look down both sides of the road. Do you see any lots that are empty or vacant? If yes, think of this... Why sign a lease with you when they can buy the land for X (I’ll assume it will be cheap if there are a few lots available) build a new store for let’s say 1mm. Sign a 20 year land lease, then sell the property for $4mm. 

They KNOW that a dump of a lot becomes a gold mine when they enter. Now if you are in a major populated area and no available lots, then you are on a reasonable quest. Please share with me if and how you nailed them.

Most are not in the business of owning they lease only. 

@Greg Dickerson

Thanks Greg I own the vacant lot too there is only one on the street. we r in a booming area with the growth of gas and oil workers flooding the area and and there is a bridge being built across the Ohio River 1/8 mile from my buildings. there is not any place for breakfast in my town and the next town. I really don’t want to be a franchisee. But I’m open to it.

Originally posted by @Patrick DeGarmo :

@Greg Dickerson

Thanks Greg I own the vacant lot too there is only one on the street. we r in a booming area with the growth of gas and oil workers flooding the area and and there is a bridge being built across the Ohio River 1/8 mile from my buildings. there is not any place for breakfast in my town and the next town. I really don’t want to be a franchisee. But I’m open to it.

You do not have to be a franchisee. What I meant was you have to contact the franchisee to see if they want to put a location on your property. 

@Gaspare U.

Thanks I do own the only lot on the street out of the flood zone.. and we are in the heart of the booming gas and oil boom and there is no breakfast coffee place in town or the next one.. there is a bridge being built 1/8 away across the Ohio river connecting Wv with Ohio. Projected completion 2021

Originally posted by @Greg Dickerson :
Most are not in the business of owning they lease only. 

I agree, but it seems they build and sell as a "leaseback sale". Or they have a deal with a developer. Check this out as an example. I was just emailed this today!

Seems I can NOT post links but google SIG (Sands Investment Group) and they have all the commercial NNN listings your hearts desire. The most recent they sent me today was listed as:

Sleep Number in Mount Pleasant SC

$3.5mm with 5.90% CAP

Tenant: Sleep Number | Mount Pleasant, SC
Premises: 0 SF
Renewal Options: 2 x 5 Years

Lease Expiration: 5/2/2029
Lease Type: NN
Rental Increases: 10% Every 5 Years & At Options

It's a brand new build. Why wouldn't sleep number want to capitalize in some form on the sale of 3.5mm? I would imagine that 3.5mm - cost of lot - build out = a pretty good penny. But again this is only my speculation i have no proof but a builder could make a fortune with this sort of agreement with a National Tennant.   

 

Originally posted by @Patrick DeGarmo :

@Gaspare U.

Thanks I do own the only lot on the street out of the flood zone.. and we are in the heart of the booming gas and oil boom and there is no breakfast coffee place in town or the next one.. there is a bridge being built 1/8 away across the Ohio river connecting Wv with Ohio. Projected completion 2021

Care to share an address to google map it? If not, no worries I understand. I will share this, the only time I have seen Starbucks rent out a place has been in Manhattan and Brooklyn. I live in Cranford,NJ and they recently opened two. One was a brand new, single tenant corner lot that was vacant, I assume someone (Sbs or a Developer who has an agreement with them) bought it and built it. The 2nd was rented out in a brand new complex in Cranfords South Downtown. I actually had an opportunity to buy a SBs and T-Mobile combo new build in Blue Springs, (KC MO area) but passed. It seems in urban and rural areas they build and sell it with a new lease in play vs taking an empty store front and increasing the LL's property value.  

I wish you luck, I'll cross my fingers, hell I'll even light a candle for you this Sunday. Just do me a fav, if you land them give me a ring and tell me how.

 

Originally posted by @Gaspare U. :
Originally posted by @Greg Dickerson:
Most are not in the business of owning they lease only. 

I agree, but it seems they build and sell as a "leaseback sale". Or they have a deal with a developer. Check this out as an example. I was just emailed this today!

Seems I can NOT post links but google SIG (Sands Investment Group) and they have all the commercial NNN listings your hearts desire. The most recent they sent me today was listed as:

Sleep Number in Mount Pleasant SC

$3.5mm with 5.90% CAP

Tenant: Sleep Number | Mount Pleasant, SC
Premises: 0 SF
Renewal Options: 2 x 5 Years

Lease Expiration: 5/2/2029
Lease Type: NN
Rental Increases: 10% Every 5 Years & At Options

It's a brand new build. Why wouldn't sleep number want to capitalize in some form on the sale of 3.5mm? I would imagine that 3.5mm - cost of lot - build out = a pretty good penny. But again this is only my speculation i have no proof but a builder could make a fortune with this sort of agreement with a National Tennant.
These deals are done by developers not the tenants.

These types of deals are built, leased up and sold by developers not the tenants. The tenants are not developers and do not want any part of the real estate and development business. It requires too much capital and time that is better used to opening new stores. Example would be a $3.5 million building requires $750k in cash and the rest in debt and a year or more to develop from concept to completion. They can open 10 leasehold spaces with the same capital and timeframe with zero debt. It's not their business model. They are retailers and that's the focus. You will find this in the NNN space with all the major regional and national chains. Some smaller mom and pop operations might want to own their own building but not the big boys.

Originally posted by @Greg Dickerson :


These deals are done by developers not the tenants.

These types of deals are built, leased up and sold by developers not the tenants. The tenants are not developers and do not want any part of the real estate and development business. 

It requires too much capital and time that is better used to opening new stores. Example would be a $3.5 million building requires $750k in cash and the rest in debt and a year or more to develop from concept to completion. They can open 10 leasehold spaces with the same capital and timeframe with zero debt. It's not their business model. They are retailers and that's the focus. You will find this in the NNN space with all the major regional and national chains. Some smaller mom and pop operations might want to own their own building but not the big boys.

McDonalds would disagree with you.

https://medium.com/@alexcjensen/forget-burgers-mcdonalds-is-a-real-estate-company-49658d4d9061

I've seen Two River Bank (249 N Ave W, Cranford, NJ 07016) built practically overnight. I spoke to an architect in KC who had a thriving business in the 80's wither away 20 years later. He told me the reason was Franchise is King in KC MO. And they buy one plan and use it over and over and over. 

You seem to have more experience than me in this. I have a 3 store strip in Lyndhurst NJ. I'll pay you a handsome commision if you land me a favorable lease with a National Tennant.  I'm not here to argue or insist, just learn and gain knowledge. So like I said you seem to have a lot more experience than me, if you say companies do not make a profit of the erection and development I'll take your word for it. Thank you for your time Mr Dickerson, I always love reading your comments and gain much from it.

 

Originally posted by @Gaspare U. :
Originally posted by @Greg Dickerson:


These deals are done by developers not the tenants.

These types of deals are built, leased up and sold by developers not the tenants. The tenants are not developers and do not want any part of the real estate and development business. 

It requires too much capital and time that is better used to opening new stores. Example would be a $3.5 million building requires $750k in cash and the rest in debt and a year or more to develop from concept to completion. They can open 10 leasehold spaces with the same capital and timeframe with zero debt. It's not their business model. They are retailers and that's the focus. You will find this in the NNN space with all the major regional and national chains. Some smaller mom and pop operations might want to own their own building but not the big boys.

McDonalds would disagree with you.

https://medium.com/@alexcjensen/forget-burgers-mcdonalds-is-a-real-estate-company-49658d4d9061

I've seen Two River Bank (249 N Ave W, Cranford, NJ 07016) built practically overnight. I spoke to an architect in KC who had a thriving business in the 80's wither away 20 years later. He told me the reason was Franchise is King in KC MO. And they buy one plan and use it over and over and over. 

You seem to have more experience than me in this. I have a 3 store strip in Lyndhurst NJ. I'll pay you a handsome commision if you land me a favorable lease with a National Tennant.  I'm not here to argue or insist, just learn and gain knowledge. So like I said you seem to have a lot more experience than me, if you say companies do not make a profit of the erection and development I'll take your word for it. Thank you for your time Mr Dickerson, I always love reading your comments and gain much from it.

 

This is not a one size fits all. Most large retailers do not own their buildings or spaces. Yes McDonalds is one of the exceptions but they also lease certain spaces as well. They use the real estate to control the franchisee. For a retailer the highest and best use of their capital is opening new stores not buying and building real estate. They make a much higher return on their capital investing in new stores than they do in real estate. In fact you can get a much higher return on capital buying and building businesses then you can buying or building Real Estate right now.

 

Originally posted by @Gaspare U. :
Originally posted by @Greg Dickerson:


These deals are done by developers not the tenants.

These types of deals are built, leased up and sold by developers not the tenants. The tenants are not developers and do not want any part of the real estate and development business. 

It requires too much capital and time that is better used to opening new stores. Example would be a $3.5 million building requires $750k in cash and the rest in debt and a year or more to develop from concept to completion. They can open 10 leasehold spaces with the same capital and timeframe with zero debt. It's not their business model. They are retailers and that's the focus. You will find this in the NNN space with all the major regional and national chains. Some smaller mom and pop operations might want to own their own building but not the big boys.

McDonalds would disagree with you.

https://medium.com/@alexcjensen/forget-burgers-mcdonalds-is-a-real-estate-company-49658d4d9061

I've seen Two River Bank (249 N Ave W, Cranford, NJ 07016) built practically overnight. I spoke to an architect in KC who had a thriving business in the 80's wither away 20 years later. He told me the reason was Franchise is King in KC MO. And they buy one plan and use it over and over and over. 

You seem to have more experience than me in this. I have a 3 store strip in Lyndhurst NJ. I'll pay you a handsome commision if you land me a favorable lease with a National Tennant.  I'm not here to argue or insist, just learn and gain knowledge. So like I said you seem to have a lot more experience than me, if you say companies do not make a profit of the erection and development I'll take your word for it. Thank you for your time Mr Dickerson, I always love reading your comments and gain much from it.

 

 McDonalds is a true exception to the franchise model. They are one of the very very few that actually take into consideration the value of the land. Exactly as the article points out, the founder saw the value in buying land. MOST frachise companies don't care whether or not the location is actually owned by the franchisee or leased. They just care about what it looks like and what the revenue will be. Since they dont pay to build anything and the loan being on the local guy, it makes no difference to them.

I went through the process of getting both of these companies onto our lots that had extremely high traffic counts and extreme growth in the area. I finally got hold of the contact information and found their requirements. If you need me to do a little research for you to improve your chances let me know. Also, are you on the going-to-work side of the road and do you know your traffic count, median income, etc? 

Starbucks tends to have their own contracts with certain development companies and Dunkin usually has a specific broker in the area that represents them. If you need contact info for Dunkin as well let me know.

Originally posted by @Gaspare U. :

Can anyone show me a place that was vacant and a franchise took it over with a new lease?

 Pretty much every Jimmy Johns I've seen in every city i've lived in. They always go into small strip mall areas with vacant stores. Now granted a couple of those spots where new builds but I've seen them go into existing spots. I dont see stand alone JJ very often. 

I will add that franchises that work as stand alone buildings do tend to prefer buying the land but will lease if the location deems it worth it. (i.e. 5 Guys, McDonalds, etc)

A lot of people dont consider gas stations as franchises but most actually are. My father leased land to a Huck's gas station and they built new and leased for 20 years before it left and a Casey's moved in. They wanted to lease it but my father offered to sell it out right to them because he wanted to move on to something else...but could've leased it again. 

Originally posted by @Gaspare U. :

Can anyone show me a place that was vacant and a franchise took it over with a new lease?

Sounds like you need to spend some time with a commercial real estate broker. They can help you.

 

Originally posted by @Greg Dickerson :
Originally posted by @Gaspare U.:

Can anyone show me a place that was vacant and a franchise took it over with a new lease?

Sounds like you need to spend some time with a commercial real estate broker. They can help you.

Have one you can recommend? 

@Patrick DeGarmo  

As I was reading all the comments, and I was thinking why these TWO retailers? 

Surely, there are other retailers who may have the requirements for the space you have and getting a good retail broker in your area may be able to help you. Just a thought. 

I have a Starbucks at one of my property listings, and know the real estate broker contact for W Virginia. Message me.  Also, is the site in Wellsburg? If so, the market looks small for a Starbucks store. Looks like most of their locations in the area are in-store cafes inside larger box stores. Closest Starbucks store I see is on a pad at the Ohio Valley Mall, which is a regional trade area location. 

@Damon DiPlacido

Yes in wellsburg wv and the it don’t have to be star bucks or dunkin.. but there is a lot goin on people are flooding the area for gas and oil work I’m in the heart of the Marsellus and Utica shell and there is no place to sit for a quick coffee or breakfast