40% Rent Increase Over 8 Years......

Business By littlecake Updated 1 Nov 2010 , 3:42pm by littlecake

littlecake Posted 26 Oct 2010 , 4:57am
post #1 of 16

i need someone smarter than me to tell me if this seems like a lot...or is on target for the rate of inflation.

15 replies
jason_kraft Posted 26 Oct 2010 , 2:07pm
post #2 of 16

You can't really go by the national (or even the local) inflation rate, you need to look at how much comparable properties in the area rent for. If comps are higher, you are getting a good deal, and if they are lower, you aren't.

A 40% increase over 7 years sounds pretty reasonable for a high-demand location in a growing area.

mayo2222 Posted 26 Oct 2010 , 2:32pm
post #3 of 16

You can always talk to a local broker and see what compariable rents are. The closest I can get to is Tulsa, which has retail rents of about $10.26 psf right now.

If your lease is up or coming up in the next few years and you want to stay this is a great time to renew as vacancy increasees are putting a downward push on rents. You might even be able to get some rental concessions.

Kitagrl Posted 26 Oct 2010 , 2:40pm
post #4 of 16

I dunno but that's what the price of butter did! haha ugh...but...good luck! No fun, for sure....that's huge.

loriemoms Posted 26 Oct 2010 , 2:49pm
post #5 of 16

I dont know, seems high. I would fer sure have your lawyer look at it before signing ANYTHING.

MissBlu Posted 26 Oct 2010 , 3:43pm
post #6 of 16

I am a real estate admin by day and a caker by night. Generally speaking the rent should escalate on 2 - 3 % increments. What is your tenant improvement allowance? May be the improvements the landlord is making to the space he is trying to recoupe in the rent. I would advocate finding a real estate broker for Tenant rep. Their fiduciary responsibility is to you and they would get paid a commision by the Landlord. Tenant rep real estate brokers know real estate as you know cake.

There are many variable that can effect a rate: improvements, length of lease, lease type (N, NN, NNN, Full Service), rent abatement, present vacancy in the market ( if there is a high vacancy then you could possible get a better deal), zoning restrictions (could work for or against you), your market and what development plans may be in the works.


Feel free to pm should you want/need clarification on any thing. Alot of these terms make sense to be but they are a part of my daily mix.

mayo2222 Posted 26 Oct 2010 , 3:50pm
post #7 of 16

How are your current rent increases structured? Is a certain %, a CPI increase, a CPI + $ or a straight $$ amount?

Personally it seems alright, but I don't know your market. You have to remember that your looking at a 8 year period so if your rent went from $7 in 2002 to $10 psf in 2010 it doesn't to be that bad.

According to the CPI for the South Urban region it appears there has been about a 22% increase in CPI from 2002 until 2010

KoryAK Posted 26 Oct 2010 , 5:39pm
post #8 of 16

My rent goes up $100/month each January. At the 8 year mark, that's 23%. Again, though, location is 90% of this equation.

Ruth0209 Posted 31 Oct 2010 , 5:07pm
post #9 of 16

There is so much empty commercial space in my area that they're trying to give it away. I'd never sign that kind of long-term commitment in this market. There is no inflation in the real estate market right now. They'd be lucky to get the same rent for the next 2-3 years. Do your homework before you agree to anything.

scp1127 Posted 31 Oct 2010 , 6:46pm
post #10 of 16

What is going on in terms of property value has everything to do with location and what the market will bear, not the national economy. As stated previously, we do not know what improvements have taken place and how much that particular piece of real estate is in demand. The rental value of that particular property is very easily determined by someone with the right knowledge of the area and the particulars of the lease.

littlecake Posted 31 Oct 2010 , 6:49pm
post #11 of 16

well i'm moving to a bigger place, and it's less expensive too...oh yay rehab....it should take 6 to 8 weeks. opening 1-1-11

indydebi Posted 31 Oct 2010 , 11:45pm
post #12 of 16

My shop rent was locked in for a set number of years but the common areas usage fees were subject to increase at any time, depending on what work and/or improvement are being made.

My "rent" remained the same, but after they put in new parking lot lights, painted the whole exterior of the building, repainted all fo the parking lines in the parking lot, my common usage area fees when thru the roof! Couple that with the empties in our small mall and the total cost was split up among the existing businesses, which made our "share" larger than it woud have been had all fo the stores been occupied.

-K8memphis Posted 31 Oct 2010 , 11:52pm
post #13 of 16
Originally Posted by littlecake

well i'm moving to a bigger place, and it's less expensive too...oh yay rehab....it should take 6 to 8 weeks. opening 1-1-11

Yay, Little Cakelette!!!!! one-one-eleven too cool

littlecake Posted 1 Nov 2010 , 3:12pm
post #14 of 16

been missin you k8!

my son moved here from tennessee a couple months ago, now we work together at the bakery.

-K8memphis Posted 1 Nov 2010 , 3:18pm
post #15 of 16

I was wondering about him!!! I'm so happy for you--y'all totally needed each other!!

Thank you LittleCake, missed you too.

It's kinda nice to be back but people totally go for the jugular around here wtf is up with that. I've been whammied several times already<<<Rhetorical no answer needed.

littlecake Posted 1 Nov 2010 , 3:42pm
post #16 of 16

i don't post as much as i used to either

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