Thursday, May 12, 2005
1026 Court Street
The commercial real estate company that handled the space on Fifth Avenue (which fell through due to zoning restrictions) also is representing the Court Street properties, so it was easy to shift my efforts to the Court Street space. Brian (the agent I'm working with) drafted up a LOI (Letter of Intent), outlining the basic terms I'm offering: rent, length of lease, free rent, and basic improvements to the space. In the world of commercial leasing, everything is negotiable. A typical commercial lease is 3-5 years, and depending on how many years, it's common to get one or more months of free rent at the beginning, to help you get started. I asked for a 3 year term and two month's free rent, which is pretty standard. They also agreed to a standard build-out: finishing off the space so it can be used. The space is raw - bare concrete floor, bare wall studs, no ceiling. A minimal build-out includes sheetrock, drop ceiling, standard light fixtures, HVAC, and electricity.
Lo and behold, they accepted my initial terms, with one exception - they countered with a slightly higher rent than I asked for. I was expecting this. It all sounded good. One detail remained: there's no store room, it's one big rectangle of a space.
I came up with the idea of a moveable wall... a 7-foot high partition built so that it could be moved easily. The space is pretty huge and I don't have the funds to fill it up with inventory. With a moveable wall, I can make the selling space fit the inventory, and as my inventory grows I can reconfigure the space. At first the agent told me they would do it and roll the cost into the lease payments. In the end, however, the landlord said 'no', I'd have to pay separately for it. Sigh.
After going back and forth a bit, they sent me a draft of the lease. It was a book - a half-inch thick! Aack. I hired a lawyer to go through the lease and make sure it was all kosher. The guy I used was recommended by the real estate agency - he's a tenant in the same building and has helped negotiate four other leases in the building. He went through it quickly and came up with a variety of changes and deletions. Most of these changes the landlord agreed to. In the end it was all good.
I am ready to sign this sucker and get the show on the road! Too much talk and not enough action!
Posted by Warren at 10:44 AM