I was wondering what a average price for a leased building. The one I like is $2500 + 15% profits for a 45,000sf building that has fire system and sprinklers, ample electrical, one month setup and one month takedown. Also in a great location. Any advise would be great.
How do you keep them from finding a permanent buyer? Is that 2500 a mth?
Sounds like a killer deal to me.
Everything depends upon the local market. Here you would be looking at 75 cents to a dollar a sq foot for a warehouse space, retail priced upon location so you're talking maybe $2+ a sq foot. 45,000 sq feet could $33,000 to over $90,000......a month!!!!
One thing to consider is the clause of 15% of profits. Are they talking gross profit or actual (net) profit??
Meaning if you charge $10 and get 10,000 people you have a gross profit of $100,000, 15% of that is $15,000. (gross profit)
But if you take in $100,000 then minus out rent, power, advertising, manpower, insurance....etc. you may only have a net profit
of $40,000. Now 15% of your net profit is $6,000.
So make sure you are both talking apples to apples. Also check comparable properties in your area. Do you have enough time for tear down?
How much does he charge if you exceed it? What are the utility costs for the building? Are there any other hidden fees such as CAM fees?
Think of all the scenerios first and address them in writing.
It sounds like you have a deal, just make sure you're protected.
That's dirt cheap (especially if it's in a great location) considering we're still searching for a spot with around the same 30,000-45,000 sq ft, which are in awesome locations as well. However, the locations we're interested in range from $8K-15K per/mo. Negotiations are still in progress.
Now, when you guys do this leasing..(and this may come off as a dumb question)..you guys are only paying for the time you are open right?
You're very lucky to find something like this although I have no idea where you're located. Your lease terms will probably be $2,500/month for the 45,000 sq. ft. building. If you're only paying for the time you're open, that would mean the building is no longer in your custody in between open dates and the owner can lease it out during the time you're closed. Think about it for a minute. Does that make any sense? It's like leasing an apartment. Does the rent stop just because you went away on a vacation? Absolutely not. I'd jump on that deal if you haven't already. Out here in the Philly, Pa. area, you can't get a 1,000 sq. ft. space for $2,500. If this property is what you say it is and you don't jump on it, I'd strongly recommend you do not go into business.
So far we agreed to $2500 down when start setting up (sept.1) and haunt would run whole month of october then have till Nov.30th to get out. 15 % of net profit due 2 weeks after last operating day. It is located in a very large mall in a very populated area. The owner of the mall loves halloween so she cut me a great deal. And if that was not enough the price includes electrical/utilities, fire system, 2 entrances, and mall security!
How did you communicate what the profit is or that there would be a net profit? It sounds to me like the $2500 is for all those expenses you listed that are included. Dues to the mall for security, utilities on going insurance etc on the space. So you have it at cost perhaps. Now how does it create a net profit? What if it only covers expenses?
I'm just saying I would be in for 20% of the ticket price (Gross) with conditions on understanding how it will be marketed. So, if you don't return a good number she no longer likes Halloween or it is deemed to be a waste compared to other per square foot tenant potentials?
It does sound like a good deal. Maybe just meeting the responcibility of the regular fees for a few months buys her some time? If you would really let her like Halloween you might develop a relationship rather than a one time experiment. I don't do deals where everyone elses expense are handled and if there is anything left I get a percentage.
I kind of freak out people when I make sure they are going to make money. The catch is it is in their best intrest to add capital to the marketing plan or provide additional marketing resources they have available to them to try to up how much that percentage actually becomes.
You might get replaced in that one space but, the same lady or her group certainly has realestate intrests in addition to that. It sounds like the big expense trying to be covered here is only the property tax value on the place per month. Bad math on her part. Still I would get rid of the $2500 you have to put up front and offer a percentage of the ticket price. A better deal for her or them that will buy you a future and you don't have to come up with seed money that covers their expenses.
Tell me how this works? Like what would the tickets cost and how may people do you expect to get as customers?
Last edited by Greg Chrise; 04-16-2011 at 09:16 PM. Reason: rumplestiltskin
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