Commercial rent increases

[Tom D]

I stopped going to my tenant's restaurant because portion got smaller and not as tasty as before (also when I heard about the rodent issue).

The #1 failed business in the country is restaurants. And the above is only some of the ways it's killed. Take out only is the best way to go, if you're doing food. Unless you are in a university area, then will always be busy.
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[BRCJR]

Simply tie the rent to an audited gross revenue with a floor. Be willing to go up OR down.

 

[BRCJR]

The #1 failed business in the country is restaurants. And the above is only some of the ways it's killed. Take out only is the best way to go, if you're doing food. Unless your are in a university area, then will always be busy.
.

Spent 30 plus years in the restaurant industry.

1 year 90% fail rate
2 year 80%
3 year 70%
4 year 60%
5 year 50%

and it never gets any better than year five.

Do not believe me? Too bad Paul Harvey is long gone, he could tell you the rest of the story......

 

[KHS445]

One of my tenant told me last week that he is going to sell his business. He paid rent on time last year but since December been struggling and late.

Biden’s economy timeframe.

I stopped going to my tenant's restaurant because portion got smaller and not as tasty as before (also when I heard about the rodent issue).

Probably due to the rats eating part of your food and seasoning the food as they walk across it. As the landlord I would get the rodent issue under control. Once word gets out about rodents in the business the space may become stigmatized and impact future tenants/clients interest in the property. I know you have great leases and the tenant is responsible, however if the tenant is gone the problem will be worse and will be all yours.

 

[Tom D]

Probably due to the rats eating part of your food and seasoning the food as they walk across it. As the landlord I would get the rodent issue under control. Once word gets out about rodents in the business the space may become stigmatized and impact future tenants/clients interest in the property. I know you have great leases and the tenant is responsible, however if the tenant is gone the problem will be worse and will be all yours.

That restaurant getting a public rodent notice will kill the next restaurant, reguardles it being another one. You need to send someone in there to protect your building's good name.

 

[Fernando]

The #1 failed business in the country is restaurants. And the above is only some of the ways it's killed. Take out only is the best way to go, if you're doing food. Unless you are in a university area, then will always be busy.
.

The "shack" takeout across the street is doing so much better with more customers than my tenant's restaurant. I was standing there outside during lunchtime waiting for someone and they had few customers.
As for potential tenant I'm talking with on another restaurant, it's been taking too long in negotiatins. Not sure if the high tariffs are giving him second thoughts in opening a Mexican restaurant. I heard avocados and lime and other products from Mexico will increase cost of operation.

 

[BRCJR]

The "shack" takeout across the street is doing so much better with more customers than my tenant's restaurant. I was standing there outside during lunchtime waiting for someone and they had few customers.
As for potential tenant I'm talking with on another restaurant, it's been taking too long in negotiatins. Not sure if the high tariffs are giving him second thoughts in opening a Mexican restaurant. I heard avocados and lime and other products from Mexico will increase cost of operation.

Why not ask him if the high tariffs are the ultimate reason for their indecisiveness? You should know how to do due diligence in your discovery, shouldn't you?

 

[KHS445]

The "shack" takeout across the street is doing so much better with more customers than my tenant's restaurant. I was standing there outside during lunchtime waiting for someone and they had few customers.
As for potential tenant I'm talking with on another restaurant, it's been taking too long in negotiatins. Not sure if the high tariffs are giving him second thoughts in opening a Mexican restaurant. I heard avocados and lime and other products from Mexico will increase cost of operation.

Avocados are about $1.00 a piece at Walmart and limes are about $1.50 a pound. If a 10% to 20% increase in tariffs of these two items puts the restaurant in jeopardy of continuing operations, they are already bankrupt. Especially when one considers the relatively minor cost these two items represent in a Mexican restaurant operation.

I have been in Florida for the last month and found nearly all the sit down restaurants are charging between $3.99 and $5.00 for pop, ice tea and even soda water. While they may lose a bit of margin a some items due to newly implemented tariffs, they are making a 99x’s markup on fountain drinks.

Below are the results of a quick Google search regarding avocado production. Guess Mexico is not the major supplier, especially to California. You will need to find something else to blame for your tenants potential failure.

Avocados (Persea americana) are a fruit and not a vegetable. They are thought to have originated in Mexico and Central and South America. Avocado trees were first planted in Florida in 1833 and then in California in 1856.
Avacados
According to NASS, California now accounts for the majority of U.S. avocado production, followed by Florida and Hawaii.

Production

The value of U.S. avocado production measured $341.9 million in 2021. The United States produced 149,600 tons. The total number of U.S. acres in production stabilized at 51,840 (NASS, 2022).

 

[Tom D]

For a restaurant to be successful, i believe that they need to seat 100 people. That is a big overhead space, that will eat you alive if you don't fill it. And any day that things don't go well, you lose some customers. To install a kitchen in a small restaurant space is around $100,000. It seems in my neighborhoods the take outs have survived. But they all have the same tasting food. A good different tasting takeout will make money.

 

[Fernando]

Avocados are about $1.00 a piece at Walmart and limes are about $1.50 a pound. If a 10% to 20% increase in tariffs of these two items puts the restaurant in jeopardy of continuing operations, they are already bankrupt. Especially when one considers the relatively minor cost these two items represent in a Mexican restaurant operation.

I have been in Florida for the last month and found nearly all the sit down restaurants are charging between $3.99 and $5.00 for pop, ice tea and even soda water. While they may lose a bit of margin a some items due to newly implemented tariffs, they are making a 99x’s markup on fountain drinks.

Below are the results of a quick Google search regarding avocado production. Guess Mexico is not the major supplier, especially to California. You will need to find something else to blame for your tenants potential failure.

Avocados (Persea americana) are a fruit and not a vegetable. They are thought to have originated in Mexico and Central and South America. Avocado trees were first planted in Florida in 1833 and then in California in 1856.
Avacados
According to NASS, California now accounts for the majority of U.S. avocado production, followed by Florida and Hawaii.

All avocados I buy here have "Product of Mexico". They're expensive. They perish fast and can't keep as long as apples and oranges.

Production

The value of U.S. avocado production measured $341.9 million in 2021. The United States produced 149,600 tons. The total number of U.S. acres in production stabilized at 51,840 (NASS, 2022).