Just when you think you've seen it all. I've always said some producer should make a reality show out of the restaurant brokerage business from the eyes of a broker with all the crazy things that happen to us.
So last week I inked a great restaurant deal for a place in Old Sacramento. It's a large restaurant with about 10,000 Sq. Ft. It has an street-level dining area and a basement level cooking area, offices, and banquet room. The restaurant is in great shape. The new tenant was perfect for the space with EXACTLY the right concept.
So we're moving the clsoing process along - as fast as one can given the darn state agency ABC is at a stand still unti mid-June, and the wife of the buyer discovers the restaurant was on one of those ghost hunter programs! Here is the link to the program article be amused by reading it:
http://www.sacramentopress.com/headline/18187/THE_BRICKSIDE_RESTAURANT_IN_OLD_TOWN_SACRAMENTO
The wife obviously gets concerned and one can certainly understand it if one believes in this sort of stuff. Of course, now the deal is put on hold until she can determine what percentage of the story is PR versus real.
A Crazy world!
Check us out at www.sellingrestaurants.com
Monday, August 30, 2010
Thursday, March 11, 2010
DON’T GUARANTEE THAT LEASE!
CLeases can be huge liabilities for restaurant owners. Most leases are personally guaranteed by the tenant. This means, the tenant guarantees the rent will be paid through the whole term of the lease, even when the business is closed and not making money.
All too often tenants are shocked to find out the landlord is pounding on their door asking for the rent and foreclosing on their home in order to collect past due rents. Or worse yet, they sold the restaurant and the new owner has failed to pay the rent so the landlord is asking the old owner to cough-up the monthly rent or else.
Yes, the reality of the situation is when a tenant defaults on a lease, most leases give the landlord the right to literally take every thing they own to pay the rent as long as the landlord follows the legal process.
But there is a growing trend SellingRestaurants has developed and initiated with several landlords that eliminates the need for a personal guarantee. And in this economy it could takes years to fill a restaurant space with a new tenant costing the tenant possibly hundreds of thousand of dollars.
To a landlord there is nothing worse than having a restaurant space go dark and having the tenant strip it. Restaurants have vast and expensive infrastructures in place that often cost 10’s and in some cases 100’s of thousands of dollars to build. From plumbing to electrical to sewer and all the special permits required in-between, a restaurant has some great value even when it is closed and longs as it is turn-key, ready to open the next day. In addition, it is far easier for the landlord to lease a turn-key restaurant than it is to lease a stripped facility.
To a restaurant tenant there is no less value in a restaurant sale than the liquidated value one gets from striping a restaurant and selling it piecemeal. A turn-key restaurant could sell for $50,000+ but piecemeal the restaurant and one may fetch $5,000 to $10,000 for the equipment. And don’t even think about stripping it and storing it. The cost to store it will quickly exceed the price one can receive for the equipment.
SellingRestaurants works with hundreds of landlords each year. In recent months SellingRestaurants has spearheaded negotiations with landlords to eliminate the personal guarantees and replaced it with a reversion default clause whereby the tenant hands the landlord the restaurant keys and title to the property and walks away from the lease with no further obligation to the landlord. No more rent, period! This doesn’t eliminate a tenant’s right to sell the property per se, the tenant can always do that. But it significantly reduces the tenant’s lease obligations and personal risks.
So one may say that’s a lot to give a landlord. The truth is it isn’t. One can blow through $10,000 in rent in no time. And all one may get for the equipment is $10,000. And the liability for a lease could be huge.
So would one give-up $10,000 to be relieved of all liabilities relating to the lease. Well, this author certainly hopes so!
Give your SellingRestaurants agent a call and ask him what he can do for you.
heck us out at www.sellingrestaurants.com
All too often tenants are shocked to find out the landlord is pounding on their door asking for the rent and foreclosing on their home in order to collect past due rents. Or worse yet, they sold the restaurant and the new owner has failed to pay the rent so the landlord is asking the old owner to cough-up the monthly rent or else.
Yes, the reality of the situation is when a tenant defaults on a lease, most leases give the landlord the right to literally take every thing they own to pay the rent as long as the landlord follows the legal process.
But there is a growing trend SellingRestaurants has developed and initiated with several landlords that eliminates the need for a personal guarantee. And in this economy it could takes years to fill a restaurant space with a new tenant costing the tenant possibly hundreds of thousand of dollars.
To a landlord there is nothing worse than having a restaurant space go dark and having the tenant strip it. Restaurants have vast and expensive infrastructures in place that often cost 10’s and in some cases 100’s of thousands of dollars to build. From plumbing to electrical to sewer and all the special permits required in-between, a restaurant has some great value even when it is closed and longs as it is turn-key, ready to open the next day. In addition, it is far easier for the landlord to lease a turn-key restaurant than it is to lease a stripped facility.
To a restaurant tenant there is no less value in a restaurant sale than the liquidated value one gets from striping a restaurant and selling it piecemeal. A turn-key restaurant could sell for $50,000+ but piecemeal the restaurant and one may fetch $5,000 to $10,000 for the equipment. And don’t even think about stripping it and storing it. The cost to store it will quickly exceed the price one can receive for the equipment.
SellingRestaurants works with hundreds of landlords each year. In recent months SellingRestaurants has spearheaded negotiations with landlords to eliminate the personal guarantees and replaced it with a reversion default clause whereby the tenant hands the landlord the restaurant keys and title to the property and walks away from the lease with no further obligation to the landlord. No more rent, period! This doesn’t eliminate a tenant’s right to sell the property per se, the tenant can always do that. But it significantly reduces the tenant’s lease obligations and personal risks.
So one may say that’s a lot to give a landlord. The truth is it isn’t. One can blow through $10,000 in rent in no time. And all one may get for the equipment is $10,000. And the liability for a lease could be huge.
So would one give-up $10,000 to be relieved of all liabilities relating to the lease. Well, this author certainly hopes so!
Give your SellingRestaurants agent a call and ask him what he can do for you.
heck us out at www.sellingrestaurants.com
Tuesday, February 23, 2010
The Wooden Pony
I’m reading a book about a man that not only inspired me, but hundreds of millions of people around the world. This man had a story he would tell over and over again when things got tough and people were down and out and all looked hopeless. The story goes something like this with some editing from me of course:
There were two brothers. One was persistently pessimistic while the other with obsessively optimistic. The parents wanted the two boys to come to the middle so they hired a head shrink. The Shrink met with the pessimistic boy and put a pile of toys in the middle of the room for the boy to play with, thinking this would make the boy elated with joy and optimism. Much to the surprise of the shrink, the boy just stood there and cried. The shrink asked what was wrong and the boy replied if I play with the toys I will break them.
Then the shrink met with the optimistic boy and brought in a pile of manure. Much to the surprise of the shrink, the boy ran to the top of the pile of manure and started digging and digging. The shrink asked what are you doing. And the boy responded there must be a wooden pony in here somewhere.
The moral of the story in my humble opinion is when you find yourself in trouble, start digging!
If things are not happening for you and you’re not getting listings and you’re not doing deals, then change what you’re doing. Ask other agents who are doing deals what they’re doing to get those deals done.
But to just keep doing what you’re doing…well you may as well take a hammer and pound in granite looking for the wooden pony.
The person who would tell this story was Ronald Reagan.
Check us out at www.sellingrestaurants.com
There were two brothers. One was persistently pessimistic while the other with obsessively optimistic. The parents wanted the two boys to come to the middle so they hired a head shrink. The Shrink met with the pessimistic boy and put a pile of toys in the middle of the room for the boy to play with, thinking this would make the boy elated with joy and optimism. Much to the surprise of the shrink, the boy just stood there and cried. The shrink asked what was wrong and the boy replied if I play with the toys I will break them.
Then the shrink met with the optimistic boy and brought in a pile of manure. Much to the surprise of the shrink, the boy ran to the top of the pile of manure and started digging and digging. The shrink asked what are you doing. And the boy responded there must be a wooden pony in here somewhere.
The moral of the story in my humble opinion is when you find yourself in trouble, start digging!
If things are not happening for you and you’re not getting listings and you’re not doing deals, then change what you’re doing. Ask other agents who are doing deals what they’re doing to get those deals done.
But to just keep doing what you’re doing…well you may as well take a hammer and pound in granite looking for the wooden pony.
The person who would tell this story was Ronald Reagan.
Check us out at www.sellingrestaurants.com
Tuesday, February 9, 2010
Humor on the Road
Okay, are you ready for some Arizona humor?
I'm canvassing like a dog in Scottsdale. So I decide to grab a bite to eat at a hot dog place - I figured that since I'm working like a dog I ought to eat one! So I order my hot dog with chili. I sit down and notice they're playing Spanish guitar music in the background. Strange I thought. So I was there for 20 minutes hoping the music would change. Nope. It didn't. Oh well, it must be a one off thing.
Fast forward to later in the afternoon - I go to a Chinese restaurant - which are rare in Scottsdale - go figure! I sit down and these guys are playing Top 40 music from the 70's and 80's. Go figure! So I'm eating Chinese food listening to top 40 classical rock and eating hot dogs listening to Spanish Guitar music.
Now, I'm I missing something here? Are they on the cutting-edge of creating atmosphere in restaurants by mixing the food with the different music? I don't know. But I know it was weird.
Check us out at www.sellingrestaurants.com
I'm canvassing like a dog in Scottsdale. So I decide to grab a bite to eat at a hot dog place - I figured that since I'm working like a dog I ought to eat one! So I order my hot dog with chili. I sit down and notice they're playing Spanish guitar music in the background. Strange I thought. So I was there for 20 minutes hoping the music would change. Nope. It didn't. Oh well, it must be a one off thing.
Fast forward to later in the afternoon - I go to a Chinese restaurant - which are rare in Scottsdale - go figure! I sit down and these guys are playing Top 40 music from the 70's and 80's. Go figure! So I'm eating Chinese food listening to top 40 classical rock and eating hot dogs listening to Spanish Guitar music.
Now, I'm I missing something here? Are they on the cutting-edge of creating atmosphere in restaurants by mixing the food with the different music? I don't know. But I know it was weird.
Check us out at www.sellingrestaurants.com
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