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Thread: Leasehold Improvements

  1. #1
    Join Date
    May 2008
    Posts
    13

    Leasehold Improvements

    Putting together a 5,000 square foot, 122 seat, 10BBL brewpub and would like to know what leasehold improvements from the landlord I should expect. The building is an old car dealership built in 1906 and is a historic landmark. Two story building (I will occupy the lower floor), floor is slab-on-grade concrete, 13 foot high ceilings with exposed 6"x12" floor joists for the second level. Has a concrete ramp to the second floor as they used to store vehicles up there. We have already discussed his responsibility for replacement of all the windows, the rear roll-up door, new restrooms and cleaning of the concrete floor. Question is, for the brewpub construction do I cover all plumbing, electrical and wall construction?

    Any help is apprciated.

  2. #2
    Join Date
    Feb 2005
    Location
    Helena, Montana
    Posts
    292
    Generally speaking the Lessee (you) would be responsible for any interior building finish (floor coatings, paint), build outs (new rooms), process specific plumbing, wiring, etc. Lessors are normally reluctant to provide much in the way of leaseholder improvements as they don't know what the next lessee will want to keep, etc.

    However, alot depends on the lease terms, if it is a long term lease, the owner may be much more willing to provide more improvements. Also, if you are a desirable lessee (good business plan, well financed, ie likely to succeed) and the other prospects for leasing the building are not, then you will have the ability to ask for more improvements. I would say negotiate your best deal and decide if its worth it to you.

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