Hello, out there!
I have a client in need of retail space for his salon. I found him a space in one of my listings. the space was previously leased by a salon and when the lease expired, they left all the equipments there. now the landlord wants to sell the the quipment and lease out the space. my client likes the space and wants to lease it, but he can't afford to pay for all the equipment. the landlord is asking $15,000.00 for all those eqipments.

Is there any other way my client can lease the space without buying all the equipment? He wants to keep the equipment but can't afford it. is there any other alternative?

any feedback would be appreciated. thanks

Your landlord is going to lose a deal in this market over $10 - $15,000 that (although may legally be his) was never really his?? That's smart.

Couple of points:

1. I would remind the landlord that the economy is in the toilet, and retailers doing deals are few and far between.

2. Most retailers knowing they have leverage over the landlords in today's market are making strong demands for TI money and/free rent. Since this space is basically a turnkey operation, the landlord won't need to spend any money on any tenant improvement allowance. You didn't mention how big the salon is, so let's say it's 1,800 sf - it's not uncommon for a LL to pay $10/sf on TI, or $18,000 for this space. The way he should look at it in this market is, since the prior tenant left everything, he just saved me $18,000.

In today's market, the landlord may offer 60 - 90 days free rent, and depending on the tenant, even longer periods of free rent. The free rent is usually given to allow the tenant the time to build out the space. But today, it's also just used as an incentive to attract tenants. As the space is ready to go, he can minimize the free rent he may or may not need to offer.

4. Lastly, by giving the tenant a turnkey operation and not having to fork out additional cash, the LL will make it easier for the tenant to succeed.

Hope that helps!

My concern would be, does the landlord actuallly own the equipment.You may be referring to fixtures that are attached to the building. Or you may be referred to free standing equipment that was just left behind.

how many unoccupied units does the ll have at this site? how long has the unit been vacant? how many similar units are available in the area? are lease rates declining in this market? does the tenant have his own equipment as a leverage tool (tenant wants ll to remove all equipment)? why did the previous salon leave?

Things that are attatched to the wall usually are permanent.If they were left behind and all proper steps were taken they belong to the landlord now.

The landlord is probably trying to recoup some losses the other tenant left behind such as unpaid rent,legal fees,etc.

It really depends where the retail location is and how old it is.If most are rented out his vacancy rate is low so probably won't be that motivated.

If it's newer in a good area they will budge less on negotiations.The fact your client doesn't have 10-15k would be a huge red flag as a landlord as the landlord just got through a bad situation with the previous tenant.Have you gone and talked to the other tenants to see how often the ownership changes hands,how fair the landlord is on upping rents,how much traffic the center gets and what time of the day?

These will be eye opening answer you need to know.It's not all about the sq ft. price only.

Not every retail location is hurting right now.There are waiting lists at some and others are at 50 percent vacancy for the simple fact that there rents are to high and they built the building based on a pro-forma on cash projections from the boom times.

Why not have your tenant-client pay say 1 dollar more than the landlord is asking in rent per square foot spread out over a year to compensate for the equipment.This way your client can buy it over time,the landlord gets more money,and if the client defaults the landlord can sell the equipment to someone else.