For Those That Have Retail Space - Owner Buildout ?

Business By CakeMommyTX Updated 4 Jan 2010 , 4:43am by indydebi

CakeMommyTX Posted 3 Jan 2010 , 7:02pm
post #1 of 13

For those that rent retail/storefront space did the owner do any build out for you and if so what did they do?

I found a space that was a bakery, all the equipment is gone but the walls, floors ,ceilings, wires and plumbing are all still set up for a bakery.

Basically I would need to repaint, get appliances, insurance and HD inspection but there would be no demo or build out on my part, it's all done.

Now I have certain critics in my circle who tell me that I can get any space I want and the owner will do the build out for me at no cost so I should pass on this place.

Does the owner follow the HD requirements for flooring, walls and ceilings when doing the build out?
Or is it just a fresh coat of paint and the rest is up to me?

This location I found is not my dream location, it's farther away then I want and not centrally located but... I wouldnt have to do any construction which saves me $$$ .

I checked and it recently passed inspection just a few months ago, so I know the bare bones are good to go.

So do I look into this place or do I find a place closer to me and have the owner do the build out?

Ive been desperately searching for a place just like this, basically move in ready with the exception of appliances, I think it would save on my start-up costs, am I wrong in thinking that?

Hope that's not to confusing.

12 replies
CakeMom75 Posted 3 Jan 2010 , 7:16pm
post #2 of 13

I am in the middle of this right now. I found a place I love, but it has no kitchen. Or I have with a kitchen space that I don't love, but can save A LOT on the build-out.

In this economy, owners are doing more than they used to. There is usually TI (tennant improvemnet) money that can be negotiated, but it rarely covers the cost of adding a kitchen. Plumbing work is expensive, not to mention vent hoods and gas lines if your state requires them.

Location is most important, so if the bakery is in a location you like I'd definitely look into it. You still may be able to negotiate with that owner for a lower rent or a few months free. If there is another location you like, check it out too! Get a contractor involved, so you have a real idea of how much the owner needs to cough up.

If you do find an owner willing to put in a kitchen, you will have to be very involved to make sure health code is followed. Your contractor should know a lot of that, but it's up to you to make the space meet HD requirements....HTH

indydebi Posted 3 Jan 2010 , 7:19pm
post #3 of 13

These critics in your circle ... have they ever rented commercial space before? If not, walk away from their opinion that is based on apartment living and not commercial space renting.

It was amazing to me how many of my friends had no idea how comm'l space worked. When I told them "I signed the lease", I swear to god they all said, "When do you start moving in?" Uh, DUH, I'm not renting an apartment!!!!! It takes 6 weeks to get architect drawings approved and to the state so I can get a building permit so the contractor can start doing his thing so the kitchen designer can move the equipment in .... ummmmmmm, let's see ..... I should be able to move in, in about ..... TEN OR TWELVE WEEKS FROM NOW!!!!!! icon_eek.gif

But they just thought I rented a U-Haul and started moving in a couple of ovens and a sink and I'd be ready to roll! (big sigh!)

You can try to negotiate the owner doing the build out for you, but in my short experience and with many, many conversations from others who have rented comm'l space, it's just not done. When you rent a comm'l space, you rent the space .... any improvements are on you, unless you have negotiated that up front as part of your lease.

For example, I negotiated that the owner pay for the utility upgrade to accommodate my comm'l appliances, the logic being that those utilities would definitely remain behind when I moved.

I just moved out of my shop. It's been pretty much returned to the empty box that it was when I moved in. I paid for the improvements ... I paid for the move out.

Mike1394 Posted 3 Jan 2010 , 7:32pm
post #4 of 13

Great post Debi.

Wait till you have to dig up the concrete floor for 30 feet. Call a plumber, and ask what they charge to put in a hand sink, mop sink w/ no plumbing hookups.

That will give you your answer.

Oh wait a minute the plumber doesn't do flooring. Call a flooring guy also.

Mike

littlecake Posted 3 Jan 2010 , 7:44pm
post #5 of 13

i paid for it myself...and all repairs, except the roof, fall to me as well.
i got by with 3K, but the plumbing was already good to go, and we did most of the work ourselves, except for electrical.

great post as usual debi.

jillmakescakes Posted 3 Jan 2010 , 7:45pm
post #6 of 13

Location is most important....... this depends.

I say it depends because you have to think about the type of bakery you want. Are you going to depend on walk-in traffi or walk/drive by advertising, or are you a custom shop that won't carry ready-to-go items?

If you are a custom shop, people will come to you, or you are a "destination" space. In this case, while location is important, it is still oK to be off the beaten path. I spoke to the owner of a bridal shop on a main road where I am. They have a difficult entrance, you can only reach it from one direction. They were OK with this because if people are coming to them, they are willing to go to the next light and turn around. This approach may require more advertising.

If you are a ready-to-go type (muffins scones, etc), you definitely should be in a high traffic and easy access location. People should be able to find you and stop in on a whim. This allows you to minimize your advertising, but also leaves you open if the surrounding area changes.

When I researhed my space (a year ago) most landlords weren't willing to pay for the buildout of the kitchen, but would pay for a few dividing walls. Almost all were willing to negotiate a few months free rent during buildout.

CakeMommyTX Posted 3 Jan 2010 , 7:50pm
post #7 of 13

Well my biggest critic actually works for a national franchise and has opened several restaurants, however these restaurants have budgets in the 100's of thousands and are nationally known and have more resources to work with when opening.
So I assumed that had a lot to do with the fact that a owner would do the build out for them.

All Im looking for is the cheapest way possible to open up a storefront, Im even going to skip the commercial appliances that arent HD required for the time being and upgrade when I can.

At this point in time I have very little start-up to work with, and I have to stress the very little part.
So I do not have the luxury of being picky, I just basically need a storefront that I can afford.

My way of thinking is that if I find a place that was a bakery/food establishment and it still has the gas lines, plumbing, underground grease trap, HD approved flooring, lighting, walls ceiling etc. then that saves me money and time.

I don't think with my budget and what I can afford per sq/ft I'm going to find owners knocking down the door to do 50K build outs for me.

I also would need to get a architect to draw up the space for approval but if there is no new construction going on then that could happen sooner then if I had to get a contractor , kitchen designer, plumber, electrician the whole nine in there.

This bakery has only been empty a few weeks, and like I said everything but the appliances are still there, cabinets, sink, light fixtures even the walls are still painted.

I'm just thinking this saves me time and money, both of which I have limited amounts of.

I know I shouldnt be starting a biz with no money but I'm at a crossroads, either I stay where I'm at pay an hourly rate (which is way tooo high) and I have to limit myself to 3-5 cakes per week and there is no room for expansion, or I open up my own storefront be broke for awhile but work for myself increase production and start making a name for myself and eventually upgrade.

Like I said it's not the perfect location, but walk-in biz is not what I do, it would be by appointment only.
I have searched for 2 years for something like this and this is the first one I have found.

CakeMom75 Posted 3 Jan 2010 , 7:55pm
post #8 of 13

I say go for the kitchen! Especially since you're by appt. only. Some owners will do the build-out and tack it on to your rent for the term of your lease. You'll see a profit sooner with lower start-up. Yay! So excited for you to move to the next level! Good luck to you!

jillmakescakes Posted 3 Jan 2010 , 8:03pm
post #9 of 13

If you're appt only, DEFINITELY take it! good luck

CakeForte Posted 3 Jan 2010 , 8:14pm
post #10 of 13

Hi CakeMommy. I'm in the same situation as you are. The only thing my owner covered was the ceiling because they have to. Everything else I have to pay for.....including the ceiling because they only put what is required for a general office. I'm doing the basic stuff because that's what I can afford. The bulk of the money is being spent on the plumbing and vent hood.

itsacake Posted 3 Jan 2010 , 9:26pm
post #11 of 13

One thing I noticed when looking for a place that had already been a kitchen was that the plumbing, electrical, etc. were not necessarily where I wanted them. If you can find a place that can be made to work for you, then go for it, but if you have to move it all anyway, not so much. Also, be aware that if you do ANYTHING at all to the space, you may have to put in an ADA compliant restroom, if there isn't one, which may up your expense--thought he landlord may be willing to do that piece,

When I looked at rental spaces, if the owner was willing to do the build out, the rent went up a lot to cover his expenses, so it actually didn't come out less expensive in the long run, because the rent was high and stayed high. If I was doing the build-out, they were starting lower and so increases would be lower along the way.

There usually was a little time (1 -3 months) for free at the beginning of the rental for the build-out, but what with permitting etc, it may not be long enough....

I was fortunate to be able to purchase instead of rent, but that has its own issues...

CakeForte Posted 3 Jan 2010 , 9:39pm
post #12 of 13

Yes, my rent is SUPER low, less than $900/ mo and at a very busy intersection. That makes a huge difference compared to the places that I saw that were awesome bakery/kitchen spaces....but also $3500/ month. There just isn't any way I could make that happen realistically with a business loan...which is NOT an option for me at all.

indydebi Posted 4 Jan 2010 , 4:43am
post #13 of 13
Quote:
Originally Posted by itsacake

Also, be aware that if you do ANYTHING at all to the space, you may have to put in an ADA compliant restroom, if there isn't one, which may up your expense--thought he landlord may be willing to do that piece,...



Good point and may also depend on your HD requirements and/or local building codes.

For example, in my state, I was not an in-house eating establishment, meaning I didn't sell any food that was to be consumed on-site. But if I sold ONE cup of coffee and there was a chair for them to sit on while they drank it, then I'd be a restaurant and I'd have to put in a $8000 ADA restroom in the front of the shop.

But since I wasn't a restaurant, I didn't have to do that. The restroom that was already in the back of the shp "for employees only" was all I needed.

So in my case, it didn't matter if I made any improvements or not. THe whole thing hinged on the type of establishment it became.

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