Consider surroundings and lease options
As a real estate developer it is important to me to create value in my professional projects. When a business is opening or expanding, certain steps should be taken in the planning process.
It is important to be in an area or venue where a consumer can easily compare and choose regardless of the product category, as convenience and time management are standard goals in today’s world.
Depending on the type of business, location is also a vital element. For example, a service business can be located in an area that has a lower retail rate if the business owner has built a favorable brand based on customer satisfaction.
However, an apparel store is likely to benefit from being located in an enclosed mall near competition as foot traffic and impulse purchasing are important factors in the success of this type of business. A third example would be a quick-service restaurant that must consider a high-traffic location, preferably in a location where a stop light or traffic control device is in use.
Each community is different when it comes to the best commercial locations. A business should be where their target customers are going. Some of the “hot” spots in the tri-city area for attractive commercial real estate development include the Second Street corridor and the northwest section of Kearney.
Grand Island’s development growth is along Hwy 281 and Webb Road, and Hastings’ development appears to continue along north Hwy 281. An exciting area of development in Grand Island is the redevelopment of properties in northwest Grand Island and the construction of new restaurants and retail venues.
I have leased commercial space to businesses for many years. When it comes to negotiating a lease, have a clear understanding of the lease type. Is the lease agreement a gross lease or a net lease?
If it is a net lease, is the lease agreement a single-net lease, a double-net lease or a triple-net lease agreement? Be sure to ask about the lease option renewal periods and pricing of these periods and ask if a “kick-out” clause can be inserted in the lease agreement if the business fails. It is also important for a business owner leasing property to know if a personal guarantee is required. A lessee should always demand a personal guarantee not be required in a commercial lease agreement. Failure to have this excluded may cause financial hardship if a business fails.
When negotiating the terms and conditions of a lease, ask to review the lease agreement before you meet with the lessor to negotiate a lease, prepare your points of negotiation and if you do not understand portions of the lease agreement, seek professional assistance.
And remember, a commercial property owner or management company should be your partner and want to see your business succeed. One of the most rewarding elements of my job as a real estate developer is assisting individuals in fulfilling their dream of owning a business.
About the Author
O'Connor Enterprises, Grand Island, Neb.
Ray O'Connor is a real estate developer and owner of O'Connor Enterprises in Grand Island, Neb. The company owns a variety of commercial and residential real estate.
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