Retail Tenant Source

Merry Christmas, Happy Holidays, & Happy New Year!

2010-12-25T11:36:00.000-08:00

We would like to wish everyone a very happy holiday season. Last year was an exciting one for Retail Tenant Source and we look forward to the year ahead!

Till then, Cheers!

SBA Real Estate Loans Double in Bay Area

2010-04-20T14:33:00.000-07:00

Sorbrato Scores Downtown San Jose Sites

2010-04-12T10:28:00.000-07:00

City of San Jose gains more space to locate possible MLB ballpark.

http://sanjose.bizjournals.com/sanjose/stories/2010/04/12/story2.html?b=1271044800^3172731&ana=e_vert

New management firm booked for Fremont Marriott - San Francisco Business Times:

2010-04-09T16:44:00.000-07:00

New management firm booked for Fremont Marriott - San Francisco Business Times:

Small Business Administration - News

2010-04-06T07:42:00.000-07:00

Small Business Administration - News

Pruneyard Landlord focuses on Restaurants to fill empty spaces

2010-04-05T08:30:00.000-07:00

From the San Jose Business Journal.

http://www.bizjournals.com/sanjose/stories/2010/04/05/story4.html?b=1270440000^3136271&s=industry&i=commercial_real_estate

Commercial bankruptcies up 52% in 2009 - Silicon Valley / San Jose Business Journal:

2010-04-01T20:41:00.000-07:00

Commercial bankruptcies up 52% in 2009 - Silicon Valley / San Jose Business Journal:

Things You Should Know When Applying For A Business Loan

2010-04-01T15:33:00.000-07:00

Now that the economy seems be coming out of its long protracted slump, you may be considering applying for a small business loan to help you over the hump of the slow months ahead. Or perhaps this is a good time to start thinking about expanding your business. Either way, you’ll increase your chances of getting a loan if you do some simple preparation before you go off to visit your friendly neighborhood banker.

1. Prepare a business plan – and the supporting documents

If you don’t have a business plan no self respecting banker is going give you the time of day so make sure you have one. It should detail your business operations for at least one year, but a five year outlook makes for a much stronger argument.

Cash flow projections are a vital part of your supporting documents, usually included as a sub-section of your business plan. They tell the bank what you expect to earn, how you’re going to spend their money and how you’re going to pay back their money. As you may have guessed, bankers especially like that last part.

Your previous years’ tax returns show how your business has been successful (making a profit), treading water (breaking even), or in the red (losing money). As you might suspect, the bank is not going to give you a loan if there is no indication that you actually know how to run a successful business.

Include in your documents bundle a list of your main personal assets, outstanding personal debt, and any other financial data you think may be useful. And while you’re at it, obtain a copy of your personal credit report. A solid credit report will enhance your odds of getting a loan because it shows the bank that you are responsible about managing your money. (You can get a free credit report through any of the three credit reporting agencies, TransUnion, Equifax, or Experian.)

2. Prepare yourself – for the interview

Your business plan can go a long way toward getting you the funding you want, but bankers will also judge your creditworthiness on how well you speak about your plans.

First thing you should do is to prepare a sound argument as to how the money will benefit your business. If, when meeting with your commercial banker, you say something like: “I just know this new product line is going to fly out the door that’s why I need more space so I can handle the extra inventory, and that’s why I need the money.” If you don’t get thrown out the door, you’ll certainly be asked to leave. But if you say something like: “I’ve done studies that indicate by adding this product line I will increase foot traffic in my store by 25%. That research also shows an increase of net profits of 10% per month. Let me show you the numbers.” Well now you might be asked if you would like something to drink – this will allow you the time to open your briefcase and pull out your business plan.

You should also practice responding to the following questions:
• How much money do you need?
• How do you plan on spending the money?
• Will you finance part of your plan with your own personal funds? If so, how much?
• How will you repay the loan?
• What collateral do you have to secure the loan?
• Do you have specific expertise in your business that makes you uniquely qualified to run your business? If not, who does within your business model?
• What will you do if you do not get the loan?

When you respond to these questions be polite, precise, and to the point. It will go a long way to showing lenders that you have good leadership skills and the ability to run a business through the good times and the bad.

Now go get those dollars!

U.S. property plunge - how low will it go? - The Globe and Mail

2010-03-30T00:28:00.000-07:00

U.S. property plunge - how low will it go? - The Globe and Mail

CoStar's Retail News Roundup: Mar. 28 - Apr. 3, 2010 - CoStar Group

2010-03-30T00:12:00.000-07:00

CoStar's Retail News Roundup: Mar. 28 - Apr. 3, 2010 - CoStar Group

Terreno buys 2 Fremont buildings for $7.3M - Silicon Valley / San Jose Business Journal:

2010-03-26T23:13:00.000-07:00

Terreno buys 2 Fremont buildings for $7.3M - Silicon Valley / San Jose Business Journal:

CoStar's Retail News Roundup: Mar. 21 - 27, 2010 - CoStar Group

2010-03-26T18:59:00.000-07:00

CoStar's Retail News Roundup: Mar. 21 - 27, 2010 - CoStar Group

Are Retail Lease Rates Finally Coming Down?

2009-11-02T20:39:00.000-08:00

A lot of folks have been asking me lately “are retail lease rates coming down?”

Well the real answer to that is: Yes, No, and it depends.

According to a recent report from CoStar (www.CoStar.com the number 1 commercial real estate information company), the 2009 “Third Quarter National Retail Report show[s] that there has been at least a moderate meeting of the minds between retailers and landlords, which is reflected in the national average retail asking rental rate.” The report continues, “…the national average asking retail rental rate (triple-net basis) came in at $16.94 per square foot (psf) at the close of the third quarter, down nearly 4% compared to the rate a year earlier.” So the first answer is “Yes” by as determined by national average.

But not all markets follow the national average.

CoStar tracks 63 major retail markets throughout the country. Of those 63 markets, 11 showed an increase in cost per square foot at the end of the third quarter. But of those 11 markets that showed an increase, 10 were still under the national average of $16.94 per square foot. So the second answer to our original question would be “No” since we’re using the national average as our measurement base.

The one market that was the exception, higher than the national average and still saw an increase in cost per square foot? San Francisco, which weighed in at $31.98 per square foot. So the final answer to our question is “it depends.” It depends on where you do business if the cost for retail space has gone up or down.

The moral of the story? If you are a retail business owner, hire a professional who knows the trends in your area.

I’m Scott Capen for
Retail Tenant Source
Saving Retailers, Time, Money, and Aggravation.

Common Mistakes Made By Those Who Negotiate Their Own Lease

2009-09-11T16:19:00.001-07:00

The Time Mistake

Time is most likely the biggest mistake people make when negotiating their own lease. Most business owners think that if you find a place to rent and set up shop, you pay the rent and away you go!

Not so fast folks. Assuming you’ve done all your homework which should include researching different areas, space availability, and done some comparison analysis, you still have to figure in time to negotiate the actual lease with the landlord and have it prepared which can take six months or more.

Once the lease is signed, there are usually improvements that need to be made to the space so that it will fit your business model. This means getting an architect to draw up the plans, getting the plans approved by city officials, obtaining building permits, hiring a contractor(s) to complete the work, and finally getting all your paperwork signed off so you can actually open for business. If you are using professionals to help you complete the job, the whole process can take up to six months easily. If you’re not using professionals, expect it to take at least twice as long, or even longer.

When it comes to negotiating a lease extension or a new lease on a property that you currently occupy, the “time” mistake that most people make in this situation is not planning ahead. Most people don’t think about renewing a least until it is time to actually renew the lease. That is usually about three months before the lease expires. Well, as you may have guessed by now, the likelihood of finding a new location is pretty slim because there is a lot that goes into moving a business. So what ends up happening is the business owner renews the lease because there isn’t any time to do anything else.

The Money Mistake

When you are a business owner there are many ways you can spend money even if it doesn’t appear that you are spending money. Time is a good way to spend money because if it takes you longer to do something that a professional can do in 1/8 the time, that takes you away from your business, which means if you’re not making money, you’re spending it. The moral of the story is let the professionals do what they get paid to do.

Money means negotiating the best possible rate and terms for your lease. And while those figures can easily be found in the contract, usually on the very first page, there are some other terms and conditions tied to money that are not always so obvious. Provisions like “expansion rights” will require the landlord to provide you with more space should your business explode it becomes necessary for you to expand to keep up with demand. Or “cancellation right” which will allow the tenant to break a lease if the landlord can not provide you with the space you need to expand your business (sometimes called a “kick-out” clause). A “sublet clause” that would allow you to lease out the space to another business owner should you either decide to close your business, relocate, or downsize.

Those are just a few of the clauses in a typical lease that could cost or save you money.

The Risk Mistake

A lot of people think that entrepreneurs are people who like to take a risk. Well that could not be farther from the truth. The reality is an entrepreneur leaves nothing to chance. Successful entrepreneurs have done their homework and checked their facts three times over or more. Why? Because they don’t like surprises!

Lots of small business owners will not conduct the research necessary to find the location that absolutely meets their needs. Choosing the right location can be the difference between success and failure. And just as important, is choosing a location that can meet your needs in the future. They fail to ask themselves; what if I need to expand, contract, or abandon my business completely? And if I need to do any of these things am I going to be able to without losing my shirt?

As much as I hate to say it, a lot of new business owners end up “settling” for a location because the get worn out looking at location after location and don’t know where to get the information they need that will tell them if a location will work or not.

So they take the “risk” on a location that may end up sinking their business in the long or short term.