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August 13, 2008
Retail advice
So I landed a possible retail space in a PRIME Brooklyn location. I won't say where as its not public info yet. Its about 500 sq ft. The rent is 3K. Key money for a 5 year lease is under 100K. Is 6 bucks a sq ft for prime Brooklyn retail a deal these days? I haven't owned a store in 20 years. Thanks
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What are the surrounding rents and what do you expect the rent to be after the lease runs out in 5 years? Does your business plan support that (much higher?) rent 5 years out???
I'm interested also because I'm in the process of negotiating a lease as well.
Posted by: daveinbedstuy at August 13, 2008 3:04 PM
Dave...what is key money?
And dave...you are paying $72 per sq foot (its priced for the year not the month)
$72/sq ft x 500 sq/ft = $36,000 per year in rent.
$36,000/12 months = $3000 per month.
That is a good price for prime brooklyn (north slope, brooklyn hights)
Posted by: troll at August 13, 2008 3:47 PM
It would be helpful if you could at least give a neighborhood or area. "Prime" can mean different things to different people. "Prime" Fort Greene or "prime" Williamsburg or "prime" Bay Ridge? I'm just trying to get a better idea to help, not draw out specifics you may not want to give. A friend of mine just rented a space in Park Slope, I can ask how much she's paying per sqft.
Good luck!
Posted by: henrystreet at August 13, 2008 3:54 PM
Key money is what he's paying someone to assume the remainder of their lease...in this case 5 years he says. At least thats what it is outside the US...as long as he's not actually paying it to the landlord...which is illegal, i believe, here.
So you have to factor that into the monthly rent as well...If his Key money is $80,000...then he's paying an extra $1,333 per month for the 5 year period or $4,333 per month total. Even more if you consider the time value of money.
5 Years is a short lease in which to try and build a new business on without the economics going haywire after the end of the 5 years if the rent is doubled or worse.
Posted by: daveinbedstuy at August 13, 2008 4:35 PM
Dave is correct. Listen to the man.
At $4333 per month you are looking at over $103/sq foot.
That price is average for 7th avenue park slope and a bargin for montague street.
Anywhere else = your paying too much.
Posted by: landlord at August 14, 2008 10:43 AM
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