Commercial Leasing - LOI, ROI, WTF?

Hi Commercial Lease Seekers!

Commercial Leases are being signed faster than you can say, "How may months free was that?" Business owners are taking advantage of the pandemic plunge in commercial vacancies and are on the hunt like a wild game safari. I have experienced this first hand over the last month. Navigating the commercial lease jungle terrain can be like taking a first walk on Mars for many first time lessees.

I compare the commercial lease experience to playing a game of Tetris. You just have to keep your bundle of pixels going until you can get to a satisfactory result. There are many ways to address the range of cost and pricing variables involved in commercial leases, but the first part of getting there is simply understanding the terms, conditions and process of a commercial lease. I won't get into all the variables here in this post, but I have shared a letter below to a customer who is starting the process of making an offer on a commercial lease. I can expand on all of these topics in future posts. This may be a good way to help you understand the first part of the process.

LETTER (in part) TO COMMERCIAL CUSTOMERS

"Now that both of you have seen the space, the next steps will involve assessing your overall financial situation and future profitability in the near term (next five years) in order to make an offer for the space.

To do this, I suggest focusing on your income statement and how it matches up with the possibility of leasing the space. If you can conservatively project earnings that will meet and/or exceed your objectives based on your ROI (return on investment) for the next five years (lease term), then leasing the space may be a possibility.

Estimated ROI (Return on Investment). Assessing the many projected cash outlays (negotiable) to make the space functional will help.

These costs include:

Building specific improvement landlord:

assessments of the : 1)roof 2)electric 3)gas 4)sidewalks

Administrative:

1)architectural plans 2) Lawyer fees 3) Building expeditor permits with city

Demolition:

1) Labor cost/days required. 2) Hauling costs 3)Permits 4)Asbestos additional remediation

Buildout:

1)Construction costs including: materials, labor, permits, electric, gas, plumbing, tiling, roofing

Taxes/Insurance:

1)Yearly Real Estate Taxes 2)Liability Insurance: $1M personal and advanced injury $2M general aggregate.

Rent:

1) yearly rent 2)months free for buildout 3) months required up front to secure the space

4) yearly escalations.

Based on this brief overview, my customers can now begin the process of analyzing their business model to see what they should offer as a starting rent in their LOI (Letter of Intent) to the landlord. The second half of this letter (not printed here) addresses different offering models that may win a landlord approval and set the tenant up for a positive long term leasing solution. If you would like to know more about these strategies to successfully obtain a commercial lease, please feel free to contact me at alan@modernspacesnyc.com or call 917.613.8135 and we can get the ball rolling.

Now is the time to lock up a solid market rate commercial lease!

Large Three Bedroom Apartment in LIC/Astoria RENTED 12.1.21

RENTED 12.1.21!

Address: 38-07 34th Avenue #2

Number of Bedrooms: Three

Monthly Rent: $3,200

Private One Car Garage: $200 extra

Utilities: All utilities included

Move in Date: 12.1.21 or earlier

Broker Fee: One Month

Total Cost to move in: First Month, One Month Security, One Month Broker Fee, $20 credit check per person.

Pet Policy: No Pets

Contact for viewing: Alan Lupiani - Modern Spaces

alan@modernspacesnyc.com

ph: 917.613.8135

All utilities are included and a private one car garage for $200 extra per month for this well designed and functional three bedroom apartment in Astoria with eat in kitchen and proper living room with bright light. The apartment has great clean lines, closet space and overall finishes. Light pours in from east, west, and southern exposure. Closets are in all rooms and hallway area. The apartment includes hardwood floors, a newly updated kitchen, full bathroom with tub, and a well lit living room. There are ceiling fans in every bedroom and in the dining area. You will have a 30 second walk to the E,M,F, R subway station at Steinway Street. Be near all major shopping and restaurants on Steinway Street and Broadway including great eats at District Saigon, Raven’s Head Public House, and Brooklyn Bagel and Coffee Company. Steinway Studios is across the street as well as a CITIBIKE station! A laundromat is less than five minutes away. The apartment will be available for move in 12/1/21. Video link on Youtube upon request. Email me for an appointment!

Ridgewood Two Bedroom Apartment

RENTED! 8/30/31

Location: 1730 Harman Street #2, Ridgewood Queens

Asking Rent: $2,000 per month

Move in date: 9/1/21 or earlier

Utilities included: Heat and Hot Water

CONTACT for VIEWING: alan@modernspacesnyc.com, 917.613.8135

Check out this clean freshly painted second floor two bedroom apartment in Ridgewood. The apartment features:

• Bedrooms in the front and back can easily fit a queen size bed.

• Great east/west light.

• Ceiling fans are installed in every main room.

• Full sized closets in each bedroom with an additional overhead storage space. Separate eat in dining area from the kitchen.

• 8 1/2 ft high ceilings

• Video intercom system and a new sink sprayer!

The laundromat and Citibike station is right on the corner and you have seven minute walk to the Seneca Ave M subway stop or a nine minute walk to the Myrtle-Wyckoff L and M train station. Asking $2,000 per month, heat and hot water included. (you can get there even faster with the Citibike!) No dogs. Please email me at alan@modernspacesnyc.com for a viewing today!