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2008-11-27  BUSINESS POST | Solid businesses can succeed, commercial realtor says
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November 30, 2008
Clayton D. Zirkle
Power Realty Partners Inc.
clay@3tc.bz
What does this economic environment mean for the prospective tenant?
There is currently upwards of 250,000sf (+/-) of available retail space between Canton Street and 9 and Windward Parkway and 9 alone. That figure does not include the SuperTarget development nor the strip across the street north of Windward. The amount of available retail space is significant and absorption doesn't need to be measured in terms of statistics it is visible. Clearly times are difficult that to is obvious there's always room in the market however for solid businesses to succeed those that are not "me-too" in what they're bringing to the market but with superior services/goods that have a demand.
What kind of incentives should that business request? Demand? Expect?
Given the current Alpharetta conditions, tenants are in a "buyers economy" position. Even a solid business endeavor will most likely require a longer ramp-up time to reach "cash flow" and therein negotiation on lease terms need to consider how to facilitate such a ramp up.
Clearly the developer/owners have the need to get specific "rates" to support their financing and of course as well to facilitate the sale of the property (for those who play the "game" that way).
But there has to be balance the win-win a retail strip that sits empty or is a "revolving door" of failed under-capitalized small businesses gets a bad reputation and of course that drives down the price an owner might sell it for.
Credit is tough to come by these days, so can "free rent" and buildouts paid for through leases put a retailer in business?
Free rent and tenant improvement money basically is used to move "risk" from one to another generally from the tenant to the owner.
Both are great tools for helping the tenant get into their business but one can expect an owner/landlord to look very closely at the business, the plan, solidity of the tenant's experience and its internal design before stepping into using their own "credit" so to speak to finance a tenant's build-out and business through these methods.
For example, a tenant that puts a design together for their business that would allow for an easy take over by a sublet or business sale adds some value to the owner and thereby can help in a tenant's negotiations.
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