Is This Rent Crazy High?

Business By prettycakes Updated 2 May 2008 , 2:09pm by dbax

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prettycakes Posted 29 Apr 2008 , 10:15pm
post #1 of 41

So, I really want to open up a cake shop and am looking for a building to lease and found an empty space that is 1200 sf. I am thinking plenty of room to set up how I want and they will put walls where I want them. I place a call and the lease is $1750 a month. icon_surprised.gif Talk about sticker shock. Are they serious? I do not believe I could get that much business in a month, if I did, I couldn't do it all by my self, and there is no way people in my area would pay what I would have to charge to afford that lease, let alone the other costs involved in opening up a shop.

To give you a heads up, I live in eastern New Mexico. The high plains. There is nothing here. We have a one story mall that you can see from one end to the other. We don't even have a Target or a Sam's Club. Our only book store is a Hastings. My competitors would be Wal-mart and Albertson's (grocery store). The majority of this town can't even afford what they have to offer.

Seriously, what are they thinking charging $1750 a month? Am I just cheap, or is this expensive?

40 replies
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DesignerCakes Posted 29 Apr 2008 , 10:21pm
post #2 of 41

In my area retail space goes for $50 a sq. ft., so it's cheap in comparison. However, I personally think that if you live in a smaller town, that rent is definitely high. What does it include for that amount? Utilities? Kitchen equipment?

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MORSELSBYMARK Posted 29 Apr 2008 , 10:30pm
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I inquired about a place in Old Montreal - not too big - 7800 a month plus 1200 per month for the taxes - 9000 total - I'll keep working from home thanks

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dtart Posted 29 Apr 2008 , 10:38pm
post #4 of 41

I think that is why so many individually owned businesses go out of business - their overhead expenses are way to costly. I think you are the only one that can answer if it is too high or not but I would guess if you feel it is then it is. It is way too high for my taste. I pay $250.00 a month. I know that seems unreal for people who live in the city, but when I say my town is small I mean it is small. Horse and Buggy small! icon_wink.gif I did have an offer to open a shop in Dallas (TX) for $1200.00 mo. - it was a good location. I guess Texas is a bit cheaper than other parts of the country.

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KoryAK Posted 29 Apr 2008 , 10:38pm
post #5 of 41

Have no idea about the area and how if effects the rent, but I pay $1.50/sqft per month, $3000. Yep, store fronts are expensive. This does not include my gas, electric or anything else.

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summernoelle Posted 29 Apr 2008 , 10:39pm
post #6 of 41

Well, I can tell you that someone wanted me to pay them $550 per month for one afternoon a week. So, per month, that would be $11,000/month if I rented 5 days per week.

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SugarBakerz Posted 29 Apr 2008 , 10:39pm
post #7 of 41

I rented a building a while back here in Alabama and it was $950 for 1200 sf.... I was grandfathered into that, it goes for 1100 now... HTH

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leah_s Posted 29 Apr 2008 , 10:41pm
post #8 of 41

I looked at a space that went for $850 a month and turned it down. But I'm reaaaally cheap/frugal.

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indydebi Posted 29 Apr 2008 , 11:41pm
post #9 of 41

I have 1150 square feet and pay $1150/month (approx $10/sq ft), and everyone tells me I got a great deal. That's just for the shop. THere's an add'l $400 a month for common area maintenance., property taxes (FYI: even tho' you rent, landlords usually bill the tenants for their share of the property taxes).

Commercial anything is always more than non-commercial. You're renting a store, not an apartment.

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jennifer7777 Posted 29 Apr 2008 , 11:54pm
post #10 of 41

Is it correct that the term "triple net" is used when talking about the extra costs for property maintenance, taxes and insurance (for commercial property)?

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indydebi Posted 30 Apr 2008 , 12:20am
post #11 of 41

it pretty much means you are responsible for just about everything. So be sure to check out the super huge air conditioning unit sitting on the roof. Knew a friend who rented a space and 2 months later the A/C went out .... cost HER $12,000 to have it fixed. Not the landlord ... HER!!!

My attorney also cautioned me about the same kind of thing when he reviewed my lease.

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BlueDevil Posted 30 Apr 2008 , 12:34am
post #12 of 41


My father is a commercial realtor in Las Cruces and does work all over the state and Southwest.

Drop me a PM if you want to talk to him about costs. My guess is that in NM (one of the poorest states in the union based upon per-capita income) it will be hard to open a storefront unless you are in one of the major cities.

My 2 cents.

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divaricks Posted 30 Apr 2008 , 12:36am
post #13 of 41

I am in Alexandria VA and an 1100 sq space is running us about $1700 a month. That is actually good for my area so it sounds like a dream to pay less. We are only in negotiations right now but that is the lease we will be signing shortly. It is a lot of money but people in my area can afford my cakes. It really all depends on your target market and if you have enough there!

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indydebi Posted 30 Apr 2008 , 12:43am
post #14 of 41
Originally Posted by indydebi

You're renting a store, not an apartment.

On a side note ... I came up with the above phrase because when I signed the lease on the shop, I was AMAZED at how many of my idiot friends said, "So when do you move in?"

Holy freakin' cow! I finally started saying "6 months" with a perfectly straight face.

It's not like when you sign an apartment lease and then rent a moving truck that afternoon. Good lord, it took the architect 6 weeks to get the freakin' floor plans done and THEN another 10 days for the state to approve them! THEN we got to start on the construction ... the "10-12 day" construction job that took 7 weeks!!

But my idiot friends wondered if I would start moving in the next day ... with no sinks, no kitchen, no nuthin'.

Anyone else have idiot friends, or do I just hang out with the wrong crowd? icon_confused.gif

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kdehtan Posted 30 Apr 2008 , 12:57am
post #15 of 41

I live in Lubbock, TX (about 2 hours from you). My aunt lives in Melrose, NM, so I go through Clovis some. I do think that is high for that area. I have to agree with you, I am not sure people in that area would pay too much for cakes. However, I may be wrong being the only other choices are WalMart and Albertsons. I KNOW that is true because my aunt said those are the only places they have to choose from. That could be a HUGE plus for you. I do happen to know some people in that are who have money and would be willing to spend it for something other than "store bought".

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marysgobaa Posted 30 Apr 2008 , 1:09am
post #16 of 41

I live in a growing town in West Virginia [lots of new people moving in due to jobs in DC, about 75 mile commute] and I am actually opening a bakery this Saturday. It's 816 square feet, and I pay $750 a month. This is the cheapest I could find in the area, without renting a dump. It's not on the main street, but it's on a busy side street. The ones on the main drag were 1495 and 1500, for the ones that I checked. My rent includes garbage.

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DDiva Posted 30 Apr 2008 , 1:13am
post #17 of 41

Interesting that this topic came up today. I currently pay $725 for a little over 800 sq. ft. Went to look at a building today where I will be the only business on the property. I no longer want to share parking with other tenants (it's become a real problem). Also, I want to be on the property alone because you can't control who your neighbors are when there are other tenants on the property. The 2200 sq.ft. building that I looked at today is $1000 per month. I think I've found my new home!!

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melysa Posted 30 Apr 2008 , 1:22am
post #18 of 41
Originally Posted by dtart

I did have an offer to open a shop in Dallas (TX) for $1200.00 mo. - it was a good location.

icon_eek.gif wish i could have found this place when i was looking last fall! what area in dallas?

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indydebi Posted 30 Apr 2008 , 1:24am
post #19 of 41

DDiva, what a great deal!! I'm SO envious! congrats!!!!!!! thumbs_up.gifparty.gif

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shaloop Posted 30 Apr 2008 , 1:45am
post #20 of 41

I'm in South Mississippi (THE poorest state in the union) and the new, growing areas here (post Katrina) go for about $3000/month for 1500 sq ft of storefront space. You could find an existing building here though for about $1000/month for 1000 sq ft. I've recently moved from one shared kitchen to another with a caterer but I'm seriously thinking about my own space. I've been too chicken to commit to $1000/month. Just today I was playing with the numbers. It's a big step (though I've been in business a year and feel confident I can do it).

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Erdica Posted 30 Apr 2008 , 12:10pm
post #21 of 41

I called a place out here by me. I network with a florist who is renting a space and was asking me to move into the same mall. So I figured I'd call to check it out. Ok...$50,000/ $4,000/month. NOT including all the extra fees for landscaping and all the crud. OMG. I almost puked.

I think my best bet is going to be buying a house or something and remodeling it. I mean...holy cow! I will continue to bake out of my home until I just can't do it any more (which is going to be sooner then later). Right now I am thinking about approaching my church to see if I can rent their kitchen. *nervous*

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littlecake Posted 30 Apr 2008 , 12:58pm
post #22 of 41

Have you called any other places? around here the rent varies wildly.

I got a great deal,but it was pretty rough shape when i got i've had to fix the a/c unit twice...replace the water heater and repair old plumbing issues....a car ran into the a/c unit once...had to fix that too....asked her if she couldn't claim it on her insurance...nope, high deductable

Don't forget the utilities are gonna be a lot higher too.

you do know the commercial equipment will cost thousands of dollars, as well as the build out.

can you work from home in new mexico?

if the town is that small i think you can find a place WAY cheaper...might be a hole in the wall, but anything can be fixed up.

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Hippiemama Posted 30 Apr 2008 , 1:17pm
post #23 of 41

I've been looking for locations. Pricing has ranged from $2/sq ft and up. So a minimum of about $2000 for a small space. I'm looking into costs to build my own building icon_smile.gif

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michellenj Posted 30 Apr 2008 , 1:58pm
post #24 of 41

In my area, space goes for $48 per sq. foot, plus an additional $300 per mo. for maintenance fees (snow plowing, etc). That is in a strip mall whose "anchor" stores are Dollar General and Goodwill.

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divaricks Posted 30 Apr 2008 , 2:04pm
post #25 of 41

You may want to find a commercial real estate broker - we found one and his fees get paid by the mandlord of our rented space after we sign the lease with them. They find you locations and negotiate for you and make sure the terms and conditions in your lease are fair for what is normal and legal in the area.
We trust ours and he has even helped us in other ways for our business.

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pikle Posted 30 Apr 2008 , 2:21pm
post #26 of 41

In Clovis?? That seems ridiculously high for the area (I'm from Farmington)--I would definitely look around/contact agents to see what things around are going for. Good luck!!!

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kneadacookie Posted 30 Apr 2008 , 2:31pm
post #27 of 41

i found a little place right around the corner. 1100 sq ft for 1100. so $1 per sq ft. but it doesn't have any of the set up i need: plumbing, elec, flooring, walls. so i'd have to put a ton of money into a building that i'm only leasing. i guess i'll keep looking.

anyone start a place from scratch wanna give me a ballpark figure at how much they spent to upgrade a building???

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Lenette Posted 30 Apr 2008 , 2:46pm
post #28 of 41

Commercial rent is expensive most places. I don't know anything about your area but the high rents here ($1200 is cheap) is why I built at home. Yeah, I gotta pay off the loan but I would have needed that same money to fix up the retail space plus pay rent, utilities, etc. Is building at home an option for you?

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cupcake Posted 30 Apr 2008 , 4:29pm
post #29 of 41

Before I built my bakery, I checked into many places, most were for lease. After researching the triple net lease which is what alot of landlords are doing, I decided that I was in no way paying for maintenance and taxes for the other guy. Basically the owner is assuming no responsibility, unless of course you leave them high and dry. Then you have to add things to make your business work, which can be restrictive according to your landlord. So my first building I bought, after 4 years I outgrew the location and sold the building and built my own the way I wanted it, I was able to pay cash with my profits, so now my overhead is exremely low, which makes a big difference. I am a firm believer if you can own your own real estate your better off, then having the hassles of a landlord. That security knowing that its mine and that no one can jack with me is a peace of mind. I have many business friends that have had nightmare situations with leasing and renting, and I am sure there are "some" descent landlords, but its always worth checking out the previous tenant.

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indydebi Posted 30 Apr 2008 , 4:57pm
post #30 of 41
Originally Posted by indydebi

I have 1150 square feet and pay $1150/month (approx $10/sq ft),

Correction..... It works out to about $12/ft, not $10. 1150 sq ft x $12/ft divided by 12 months.

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