Restaurant Real Estate Advisors
helps you open a restaurant, lease a restaurant or sell a restaurant at low cost, low risk and high profit.
A personal guaranty is a security instrument whereby the person signing the guaranty “Guarantor” remains liable for the monetary obligations of the restaurant lease.
If you operate your business as a corporation or limited liability company and wish to lease commercial real estate, the property owner will often require a personal guaranty.
A Tenant Improvement Allowance is a contribution of money towards the build-out cost of your restaurant.
Often referred to as ( TIA or TI ) in a letter of intent or lease agreement, the tenant improvement allowance is typically a dollar amount multiplied by the square footage or size of the rental space.
The tenant or tenant’s restaurant real estate advisor will request a tenant improvement allowance in the letter of intent.
“Landlord shall provide a Tenant Improvement Allowance (“TI Allowance”) in the amount of ($35.00 per square foot) for the construction of Tenant’s improvements in the Premises.”
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Some things in life are clear as water. But commercial real estate often looks more like a murky swamp.
The problem with swimming in murky waters is not knowing what you might run into.
Or what might eat you!
The good news is there is a way to clear the waters and steer clear of alligators when you are negotiating a commercial lease agreement.
Do you ever feel like someone is just a few steps behind you waiting to pull the rug out from under your feet? Are you always worried that, just when you’ve saved enough money for vacation, you’ll get stuck with a huge car repair bill out of nowhere?
If you sign a lease for your restaurant, your first rent increase can feel the same way. Out of the blue your rent has been increased. How is this possible when you have only been open six months?
What is effective rent?
Effective rent is a term used to describe the actual rent paid for restaurant leases after factoring in concessions received by a tenant or paid by a landlord.
For example as a tenant you may receive free rent and a tenant improvement allowance. In addition, the landlord may be required to perform work to the building prior to delivering possession of the premises.
Understanding and calculating the effective rent will help you understand both the actual cost of your restaurant’s lease over the lease term, as well as help you understand how the landlord is analyzing the deal from their side of the table.