Commercial tenants
Our co-op in Williamsburg is considering renting a vacant storefront space formerly used as an artist studio to a store or other commercial use. I’d appreciate hearing about anyone else’s experience with this. Are there legal concerns to be aware of? How long are leases usually? Does anyone know real estate agents in the area…
Our co-op in Williamsburg is considering renting a vacant storefront space formerly used as an artist studio to a store or other commercial use. I’d appreciate hearing about anyone else’s experience with this. Are there legal concerns to be aware of? How long are leases usually? Does anyone know real estate agents in the area who deal with commercial tenants? How do you attract a book store, or even a large clothing store? Thanks!
The 80/20 rule was modified last year (that a co-op had to get at least 80% of it’s income from tenant shareholders), but there are still some ‘rules’ that you need to be aware of.
Just make sure that you can pass one of the tests listed here:
http://www.nytimes.com/2008/01/20/realestate/20cov.html?scp=1&sq=co-op%20rental%20income&st=cse
And make sure you have a good co-op lawyer.
You need a commercial real estate broker to handle this. Very complicated to handle on your own.
How big is the space? If you want a chain then you need to speak with the bigger commercial brokers such as CBRE or Cushman Wakefield.
Give Michael Higgins a call at CBRE. 212-618-7011
Usually a commercial tenant wants a long lease, 5-15 years. Those leases usually do come with minor yearly rent increases though (~2%) and then an option to renew.
A commercial lease can be 4 pages or 60 pages. Get a “Good Guy Guarantee” if you’re renting to an LLC but be aware that a commercial tenant can cancel anytime and then you have to go after the bankrupt LLC. Have a lawyer draw up the lease and sit down and talk with him about any restrictions you want to put on the commercial/business tenant. Most leases have the tenant pay their share of ALL utilities and also even ask tenant to pay for pro rata share of tax increases.
But in your facetiousness there was an element of truth.
Actually, artists don’t want to rent in Williamsburg when they can get way cheaper spaces in Bushwick. In this case, the owners are working artists trying to afford mortgages.
of course I was being somewhat, but not entirely, facetious.
throw them out that is
true what denton says about bookstores. When you have to through them out you’ll be the pariah of the neighborhood. Clothing stores are taking a beating too. The best is food and better yet is food/liquor. Always go for the franchise if you want stability. They have the where with all to do the upgrading needed in a raw space. If you go with any kind of food try to get them to do their cooking off premises. I closed with a Pret A Manger in midtown. no cooking in the store, all done somewhere else. They make their monthly rent in 3 days.