How To….Pick Your First Brick & Mortar by Sandra Manley
Mar 13, 2018 brick and mortar,commercial agents,commercial leases,commercial real estate,commercial spaces,properties,real estate,red hook,sandra manley,small businesses,storefronts,warehouse
During the past year, I’ve worked with several people looking for their first “brick & mortar” — retail, office, or manufacturing space somewhere in Brooklyn or Manhattan. Most had an existing business started in their apartment or a shared space, and were branching out as the business expanded. As prepared as these people thought they were to find their first commercial space, I noticed a few items that people tend to overlook.
While the most obvious question a prospective tenant asks is, how much is the rent, it is also important to ask what TYPE of lease the landlord is offering — Gross (Full Service), Net (triple, double, single), or Modified Gross. Depending on the lease type, the tenant may or may not be responsible for expenses e.g. property taxes, utilities, trash removal, snow removal, and interior/exterior maintenance. Sometimes a higher rent actually means a lower cost.
Another item that has come up a couple times is, will the specific property work in terms of zoning? It may be a great space in the perfect neighborhood, but does the zoning permit roasting coffee, bending metal with an open flame, or shellacking furniture with noxious chemicals? If in doubt, confirm the city allows a specific use before applying for a lease.
Speaking of applying, I’ve noticed that some people tend to underestimate what they’ll need in terms of both paperwork and money. Depending on the property and landlord, an applicant should be prepared to provide a minimum of 2-3 years of tax returns, 6-12 months of banking and credit documentation, several business references, plus application and/or credit check fees, a sizable security deposit, rent, and possibly, a broker’s commission.
And last, but not least — I would encourage every prospective tenant to do their own due diligence before signing a lease. The perfect space to open a spa may not be quite as perfect when it’s play-time at the doggy daycare next door.
**See Sandra’s current listings, including the Red Hook building pictured above, here.