Typically, a tenant will be working with a contractor from the moment they have interest in the space and could have a bid or estimate prior to signing the LOI but it could come after (hopefully, before signing a lease!)
@@neandertull6777 Good question - they want to incentivize the right tenant to take the space and know that in most cases, tenants aren't willing to pay an extraordinary amount to build out a space for the landlord. So, the landlords will typically offer some tenant improvements in order to help the tenant outfit the space and, as a result, they'll get some write offs for the capital invested and better rental rates than if they leased it as-is.
Hey Tyler, idk if this real estate agent is clueless but she’s saying the owner will “finance” me the money to build out the space but I will have to pay it back. Wtf? Shouldn’t he be paying ME to build out the space? It’s down to the studs inside, no drywall no floors. The ad listing itself says optional tenant improvement allowance, but the Real Estate Agent is really throwing me off.
Yep - unfortunately, that's a relatively common practice. Landlords will deliver the space in white box condition and offer a tenant improvement allowance to help build it out further. At the end of the day, most landlords are just baking that additional construction cost into the rent payments to recoup their costs. I highly recommend getting a good CRE broker and attorney on your side to help you navigate that process
Will the landlord give you the TIA allowance money immediately, or will you have to pay for it yourself first and then present the landlord with all of the receipts for the expenses to receive the money?
Tyler, I need advice on how to go about purchasing a hair salon business. The business is actually owned by the landlord. What can I negotiate with the landlord in this situation? Keep in mind that I will be purchasing the business from the Landlord and become his tenant. Thanks in advance for your help.
Unfortunately, I don't know much about acquiring companies since that's very different from buying commercial property. I would recommend talking to a business broker in your area that could walk you through the process
So I have a community advocate that is part of a group that is looking to buy a building in an up-n-Coming neighborhood in Baltimore. We have an alcoholic beverage company that is looking for a bottling facility and outdoor rooftop tap garden for the company and this building is perfect for that. We want to ask for complete turn key refurb of the building and building of the deck for the rooftop from the Landlord as TI. It could take $500k to complete. Think we can pull off this negotiation?
I think it’s certainly possible - at the end of the day, the negotiations are basically a math equation for the owner. The landlord is likely to push back with a rent abatement period or an increase in rent to help offset those initial costs. It’ll also depend on how strong the tenant’s credit is. Anything you can do to paint yourselves as a strong, rent-paying tenant will certainly help you get close to it. Good luck!
Is it possible to have the contractors build the space out before the abatement months began. Let's say the landlord gives you three months abatement starting in January. Can they allow the construction to start like November or December prior to the abatement months? Thanks
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