At last we had found a site for which we were willing to enter the negotiation floor. Everything about it was perfect aside from the fact that we could not possibly use the entire space, afford the asking rental rate or figure out where to park our clients. *Minor* issues. Oh yeah, and we still needed a door.
The best part about this particular lease negotiation is that, due to an unusual operations model on behalf of the landlord, every normal process would have to take five times as long as it should have to take. Instead of direct negotiation between tenant and landlord, the landlord hires a middle man brokerage firm to handle contact with the tenant. All information, everything from proposed terms to simple questions like “where do I put my garbage” have to go first through the middle man, then to the landlord and back down through the tunnel of bureaucracy. It is beautifully efficient.
Initial response from landlord: “No. Space as is. No splitting. No TI. No nothing.” Sigh. About a month later and after submitting our business plan with a convincing proposal of how we will bring new life to the building, we get an initial Letter of Intent (“LOI”) agreeing to divide the exiting space into two sites: the kitchen area for us and a prime corner-pad retail site for someone else. The LOI came literally in the nick of time to meet the deadline for our Downtown District grant meeting. I let out a huge sigh of relief before processing the rest of the letter to realize that there were only a billion points left to negotiate before the location became even close to feasible.
Now, although this is my first commercial lease, I felt comfortably informed going into the process. Two grueling semesters of business law classes on top of four years of high school debate had left me fairly familiar with legal jargon. Beyond that, I had been forced to keep the headset on during far too many conference calls with corporate lawyers during mergers and acquisitions contract discussions. And, in the ultimate preparation for entering a lease, I turned to my trusty friend, Google (still can’t figure out why we go to college when everything can be googled). Needless to say, I am nearly fluent in “lawyer-speak” (the opposite of “newspeak”). Thus, I thought we could get this whole lease thing hammered out in a month. Wrong. Again. Naturally.
Six weeks later we were barely entering iteration #5,673.56 of the LOI. Okay, it was more like the seventh version. The items for contention were being significantly whittled away. Not only had they agreed to demise the space and bring down the rent to something affordable (especially for the first few months), but we were even getting a DOOR!!! I was elated.
Meanwhile, I was putting together a team to actually design and build out the space. Kitchen Designer, Architect and Contractor slowly came together and a couple of conference room sessions later, we had a site plan to slip into the LOI as well. The trick would be to get the landlord to agree to using our site plan to do the work they had agreed upon and to help cover the cost of the plans. Not an easy sell.
After weeks of back and forth on the LOI the landlord finally provides us with a draft lease. Unfortunately, it is obviously a standard contract generated by the legal team that ignores many of the points negotiated out during the LOI drafting sessions. We are also still asking weekly for a breakdown of operating expenses and other integral details but never receiving this essential information. At least we finally had something to submit to our lawyer who is currently reviewing the document and waiting on quite a few answers and details from the landlord.
At the same time, we get inquiries every day asking us where we are going to be. We wish we could say! Although we could make a formal announcement now and hope for the best on the lease, it simply is not wise to announce a set location until our lease is signed and it is a sure thing. It would be even scarier to announce when we have not yet seen the actual lease yet! As it stands, we are just trying to push the process along as much as possible and do what we can while in this limbo. The good news is that once the lease is signed, we would be ready to jump into permitting and construction immediately! The bad news is that if this lease never gets signed, we will have all of the plans done for a site that doesn’t exist. Keep your fingers crossed for us that does not happen.

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