So, I am renting out a commercial space in the building I manage. I have had some interesting customers come by but a restaurant is most interested. There are some major issues I see with renting out a commercial space. The first concerns the viability of the business and how experienced the tenant is in running the business. Obviously, the tenant has to have enough money to make any necessary build outs, get permits, etc. I would say the next is the nature of the build out and how long that will take. Commercial tenants, from what I have been told, get free rent during the build out period. Also, a landlord should be concerned if a tenant improvement will need permits and approvals from the DOB. The concern is that the city will come in and look around and see other items that you might have to address. I feel like in considering tenants that you have to take a cumulative view, is the rent acceptable, the tenant knows what he is doing and you as the landlord is not opening yourself up to some unexpected costs.
For a restaurant specifically, the issues I am seeing/hearing about, are whether the restaurant will need a gas line or “hood”, ventilation, garbage collection, rats. All this goes on top of the standard commercial lease terms like the term, renewals, phase in for paying rent while the tenant makes improvements, subletting, insurance, and property taxes.
I must say that it feels good to be able to have power in a negotiation. I don’t have to take on anyone because I have options and cash in the bank. While you don’t want to constantly say no, the deal has to make sense for you too.