Our lease negotiations, including mezzanine construction, are going slowly, so I've been looking around at other properties. What I've found is a mixed bag, but overall pretty good. I thought I would share that with you.
Finding a larger space, in the 5,000+ square foot range, is harder than a smaller location. These mid-sized locations are fewer and they tend to be rather, how shall I say it, idiosyncratic in their offerings. I've found churches, banks, dance studios and similar unique use, previous tenants. Some are easy to transition, while others have somewhat permanent structures (like an enormous vault).
On the plus side, larger locations are harder to rent, requiring unique tenants who need more than a standard location but less than what an anchor store would require. There are not many of those businesses. This means rental rates are significantly lower.
For example, my first pick at the moment is 5,100 square feet and the rent would be the same as what we pay now with 3,300. That's a 55% bigger space for free. Granted, utilities and the like would be higher, but it still seems a bargain.
My backup plan to construction is to find a space around 5,000 sqft, have 2,000 sqft of game space (more than doubling our current allocation), 2,500 sqft of retail space (a 25% increase), and 500 sqft of restroom, office, and miscellaneous.
We're also investigating a coffee bar build out, but that's pure speculation at the moment and requires a lot of variables to line up (low rent, lots of tenant improvement money, etc.). I saw so many identical coffee bars in game stores on my travels this Summer, it seemed less daunting a project.
Moving would not be cheap. It would cost around $30,000 just to move and easily another $30,000 in improvements. We now know what we need to build out a proper game store, zoned for assembly with the proper restrooms and AC capacity. Most stores don't do this. Basically, constructing in place versus moving is kind of a financial wash. Yet, the math may just work out better depending on if we can get tenant improvement money or free rent.
Location wise, everything on the short list is in Pleasant Hill, a couple of miles from the current store, and easily accessible from the freeway. We seem to be focusing on properties around Diablo Valley College.
Timing wise, it equals out. We would start construction in our current location in January and finish in late March. If we moved, we would be moving into a finished location in ... late March. The business interruption of construction is offset by the business interruption of moving. So it's a wash.
In any case, if you're going to negotiate a lease, you should have alternatives in mind. Plan B is just such an alternative.
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