Retail store hours of operation

5 Replies

Hello everyone, I just purchased a mixed use commercial property. The property currently has a retail deli/store that I’m renegotiating a lease with. The owner had asked me if I would be ok with his store being open 24/7. I definitely would not allow it to he open 24 hours but I have been thinking about allowing them to stay open until around 1-2am. The property isnt located in the greatest area of town. Do you guys think this is a good idea? Anything I should know before i allow them to stay open this late? Any tips would be greatly appreciated !

@Ned Micic Assuming he's on a NNN lease (and covering all the variable expenses from opening for more hours), why would you not let him run 24/7?

It's in your interest and his for him to be successful in running the business and if he thinks extended hours are the way to go, I'd let him.

The hours at least here would be up to the business license from the town. If he wants to open 24 hours what would be the downside for you?
Originally posted by @Ned Micic :
Hello everyone,

I just purchased a mixed use commercial property. The property currently has a retail deli/store that I’m renegotiating a lease with. The owner had asked me if I would be ok with his store being open 24/7. I definitely would not allow it to he open 24 hours but I have been thinking about allowing them to stay open until around 1-2am. The property isnt located in the greatest area of town. Do you guys think this is a good idea? Anything I should know before i allow them to stay open this late? Any tips would be greatly appreciated !

 Why would you think you could or even want to restrict his hours of operation? I don't see what that has to do with you as his landlord. I also think you'd want him to be as successful as possible. The less money he makes at his location the more likely he is to look towards a new location that could afford him the opportunity to increase his profits. Your success is tied to his success. You need to be an advocate for his business, not a impediment.

You can restrict anything you want, question is why. If the tenant is responsible for obtaining all permits necessary to operate 24/7, god bless! The mixed use portion is the only concern as far as noise, but if the tenants above or next to it are going to take issue with the hours, letting him stay open til 2am isn't going to solve that,

Does he have an existing deli/store that operates late night?  If so, secret shop it, and read reviews.  If you allow them to operate 24/7 make sure you have strong HVAC, grease duct and grease trap routine maintenance obligations in the lease (if applicable).  These repairs are expensive for "mom and pop" tenants, so they'll usually ask for relief when problems arise. 

Always have an out in your lease to restrict hours if problems arise from late night use.  If noise is a concern, add noise mitigation language that always you/or tenant to make improvements as necessary.   From my experience late night operators are tougher on common areas, and will generally collect more trash (just CAM back to tenant).  Add lots of exterior lighting if in rough area of town (you will need it)!  

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.