??? Thanks for checking this out, I have a successfull retail business that I am selling. Everything is in place for the sale to go threw exept the landlord for some reason will not let the buyer sign a new 10 year lease.
The buyer has adequate credit and the business definately pays for itself. I am boggled, the buyer is approved for an sba loan and everything. There is only a year and a half left on my lease with a 5 year option afterwards that is not assignable.
Can anyone help me out with this, or give me some insite???
Howdy KB:
You may be stuck. I know you have thought of sub leasing the building to the new buyer and this may be the only way. Check your lease or talk to the landlord about that option. It still keeps you on the hook for the lease term and the renewal but you get the business sold. Maybe put aside some of the proceeds in case he fails and you have to pay on the lease.
Another idea is to get the buyer to offer more on a new lease. I do not know the dollar amount involved but there should be some amount that the owner would agree too. Maybe you could pay some of that if you had to.
Commerical leases are tricky especially when playing with the big players. Hope you find an easy solution. Do not give up with the first no.
Thanks Ted-
I offered $10,000 in key money (bribe) to persuade them to let me assign the option, they came back asking for $20,000 and a increase in rent. >:( but at least there is hope. These type of property owners definatley have the upper hand and can do anything they want.
Hi-
One thing you may not know – ten year leases are no longer the norm. Most deals call for 3 to five year leases with automatic bumps (raises) in the rent.
Many commercial property owners are positioning their properties for future sale (or refinance). And while having a stable tenant base is a big part of that program so is the ability to move rental rates to meet the market.
Take care,
Eric C
PS - I’ve even seen bank officers discourage long-term leases for their borrower owned commercial properties. They sometimes equate those long-term commitments to a lack of flexibilty.