The process of looking for a commercial space to establish a restaurant can be a daunting experience under normal circumstances, let alone post a global pandemic. Interestingly, as many people’s habits changed drastically last year, so have their career aspirations. “We have seen a lot more first-time tenants that used the pandemic to consider finally starting their own business,” attests Rich Bowden, a commercial broker with Caton Commercial Real Estate. Savvy prospective tenants will consult with a professional to help navigate their new venture step-by-step.
Deciding on a budget is an important first step in narrowing your search for a commercial restaurant space. “Many tenants I speak with are looking for the best deal bottom line,” said Bowden. “But they don’t typically know the true definition of what the best deal really is.” In addition to the investment of a physical structure, there are the costs of utilities, insurance, and taxes to keep in mind. A good broker can help you negotiate not only the price of your lease but lease term, rent abatement, tenant improvement allowance, and more.
Everyone has heard the three words synonymous with real estate valuation are location, location, location. Here are a few additional questions to consider:
- Is the structure large enough to accommodate the number of patrons you’re targeting?
- Is an outdoor dining space required or feasible?
- How visible is the location, and will it draw enough traffic?
- Is there ample parking and, if necessary, dedicated spaces for carry-out orders?
- Will you need a drive-thru window?
- Does the space allow for expansion?
- Will the neighboring establishments complement your business?
- Will the building satisfy all safety compliance and health codes?
All these are important considerations. Additionally, as the typical lease can last three to five years; you will want to make sure your space can grow with you.
Before signing on the dotted line, it’s imperative to have a quality broker to rely on. “We help you get the best terms on the best locations for your business,” said Bowden. Commercial brokers are assets in pointing out the information you as the client may not otherwise know. In addition, if possible, speak to the landlord in person to assess if this is someone you can have a working relationship with. Dealing with a level-headed landlord can make all the difference in how smoothly issues are handled once you’re up and running. Chances are that your broker will have insider knowledge regarding the landlord and will be able to help with the vetting process.
While these first few steps are just a small sampling of all the decisions you will have to make; it’s a good foundation for you and your broker to begin a search. For more assistance with commercial real estate, review our list of properties and reach out to our agents to assist you as you launch your new venture.
