tenant improvement costs for new space

Post
vinceallin
Junior Burger
2006/03/28 07:01:06
I am putting together $$ estimates for opening a restaurant in a new plaza. Since there is absolutely nothing in the building...it's basically a shell...the initial costs is staggering if I had to shoulder it all. Has anyone had experience in a similar start up? Can you typically negotiate a tenenat improvement allowance? Is the HVAC installation paid for by the tenant or does the developer usually take this on? I'm not sure what a developer typically pays for and gets into place before a tenant steps in and hire their own general contractor for the improvements.

I grew up in a restaurant business...working since I was 12, so I have a handle on what equipment is needed and cost for the business. My family bought an existing store so I have no experience about a virgin site. The location is the driving factor for this adventure.
thanks,
Vince
dinerminer
Junior Burger
RE: tenant improvement costs for new space 2006/03/28 12:13:19
Generally, most of the improvements you mention are available for negotiation with the property owner/developer. You can negotiate a tenant improvement allowance which usually will determine your cost per sq. ft. or rent. In most cases, the HVAC installation is paid by the developer/owner and the ongoing maintenence of the units is assumed by you. If the property is brand new,the developer can probably build to suit, at least the floors, walls, ceilings and utilities finished or roughed in. You can have a turn key buildout where all you do is decorate, furnish and equip. It all depends on what the developer is willing to do, and what you are willing to pay for. All this will effect your investment and lease. I would recommend you have the landlord do the majority of the leasehold improvements to minimize your investment and exposure. You'll figure out a way to pay the rent.