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> the landlord will do their best to extract any surplus value you generated through your skill and ingenuity It sounds like you're describing landlord behavio
by wwweston 4y ago
> the landlord will do their best to extract any surplus value you generated through your skill and ingenuity
It sounds like you're describing landlord behavior where they don't simply arrive at a target rent and happily collect it, but attempt to actively monitor revenue of businesses renting from them and then ride the line between capturing that in rent increases below the line where it's worth it to the tenant not to move and unacceptable extortion.
If so, that's both interesting and kinda terrifying. I've never considered that rental prices might be set as much by specific tenant income as market conditions, and now I'm wondering if I should never tell any prospective landlord what my real income is beyond minimum requirements.
- triceratops 4y agoA residential landlord can't charge you much more than market rate because you could just move. At some price point a mover is going to be cheaper. Often there's also various rent control laws. Commercial landlords, especially of restaurants, have way more pricing power because the tenants can't just move. Their customers expect them to be there, or there's a ton of existing foot traffic - location, location, location. And usually tenants put their own money into renovating the space for their needs.
- selimthegrim 4y agoAnd you haven’t even covered the magical world of triple net leases yet
- triceratops 4y agoI don't actually know what that is. Like I said, I've never worked in the restaurant biz. Everything I've written is just from reading random shit online.
- cthalupa 4y agoTriple net is a bog standard leasing agreement for commercial properties - it's nothing specific to restaurants. Basically, you pay the expenses on the building. Taxes, insurance, maintenance costs.
- jasonwatkinspdx 4y agoA SUPER common pattern with restaurants is someone moves in and develops a location, tries to make it work for a year or so, then tanks. Then a slightly more savvy restaurateur leases the location along with the previous tenants buildout for far less, makes minimal renovations, and then makes it a success.