Announcement

Collapse
No announcement yet.

Building rent. Advice needed

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Building rent. Advice needed

    Good Afternoon everyone,
    Just a basic question on trying to decide a property. What are most people paying for rent per square foot all in these days?

    I am trying to decide on going with a building that is very nice, with higher end multi-tenated options, vs going basic warehouse. The dilema is looking past just production or going with a building that will draw many people for Growler and Pint sales from the brewery. In the short term as a startup wilis paying the extra $1K-$1.5K a month in rent wourth it. Any suggestions?

    thanks for your help in advance

    aditya_kalra@hotmail.com
    Adit Kalra
    612Brew
    President/Co-founder

    945 Broadway ST NE, Suite 188
    Minneapolis, MN 55413

    www.612brew.com
    I'm thirsty already!

  • #2
    Rates are going depend greatly on the city you're in and what sort of property you're looking for.

    Are you looking for a brewery and tasting room, brewpub, restaurant/bar?

    Always keep customers convenience at the front of your mind and think about how they are most likely going to enter and leave your property from the main highway/road/

    Best thing you can do is enlist the services of a trained commercial real estate professional. It doesn't cost you anything since the property owner pays the commission and you have someone working on your behalf. My real state agent has been invaluable.
    Owner
    Grind Modern Burger
    PostModern Brewers
    Boise, ID

    Comment


    • #3
      Thanks for your responses. We have a great agent. My biggest struggle I am having is that this business has low margins and in the beginning it's hard for any business to survive. I was trying to understand what % of top line sales are people dedicating to rent. When does it make sense to take the risk of spending more on a high traffic area. As of the last 6 months our state has approved the sale of Growlers and Pint glasses for our City. We really don’t know what this will bring for us as we are still in the process of setting up. We are looking at 6,200 Sqft for now and hope to grow more in the future as does everyone. The balancing act is does one pick straight warehouse based, keeping it simple and production based, or spend the extra 20-30% on a much nicer building with more traffic. Financially will the extra 20-30% allocated towards rent hurt my bottom line considering we have substantial other expenses.
      Adit Kalra
      612Brew
      President/Co-founder

      945 Broadway ST NE, Suite 188
      Minneapolis, MN 55413

      www.612brew.com
      I'm thirsty already!

      Comment


      • #4
        Originally posted by adit
        When does it make sense to take the risk of spending more on a high traffic area... The balancing act is does one pick straight warehouse based, keeping it simple and production based, or spend the extra 20-30% on a much nicer building with more traffic. Financially will the extra 20-30% allocated towards rent hurt my bottom line considering we have substantial other expenses.
        All of the feedback I have received from recent microbrewery start-ups is that people will seek out your product... and in fact, many customers may find the fact that you're in a "grittier" part of town to be part of its charm. You may also have more leeway regarding noise, smells, deliveries, etc. in an industrial setting than a prime commercial location.

        Obviously, this depends a lot on what city you're in.
        Kevin Shertz
        Chester River Brewing Company
        Chestertown, MD

        Comment


        • #5
          We are having a similar issue. We have found our location, but are debating how important it is to have the tap room completed vs. saving money initially for operating costs that are sure to be high while we get started. It seems it's a catch 22. You need to put butts in seats and be ready to dispense pints/growlers - but how do you afford that? Obviously if capital wasn't a concern this would be a moot point... We will be a 3 barrel brewhouse initially so pint sales will be very important! Did I just answer my question?
          Nate Cornett
          Yellow Springs Brewery
          Yellow Springs, OH

          Comment


          • #6
            Just a couple more questions for you. 6,200 sf seems like a lot of space for growler fills, is this a full fledged brewpub or restaurant or just a beer to go concept?

            Another thing you might consider is something that we did to test our concept back in 2009. Because of the nature of the commercial real estate industry you as a tenant can get very creative in the offers you present to property owners. What we did was for the holiday season we rented a 2,000 sf space near the main shopping mall here in Boise for a flat $2,000 with no other fees like NNN or CAMS tacked on. We signed a 3 month commitment with the option to extend at that rate for an additional 3 months. We ended up in the space for 5 months.

            Another thing to consider would be a percentage deal with your landlord. If you're expecting a slow build for your business offer a percentage of gross sales to the landlord and option to reexamine the terms in 6, 12 or 18 months. This way if your gross sales are low you're only giving up 10% to the landlord vs a big monthly rent check.

            On the high traffic vs industrial argument I'd just say that whatever money you save on a space off the beaten path you're most likely going to end up spending all of that savings and more on marketing to guide people to your door. If you don't feel that 6,200 sf in a high traffic area is in the budget I'd look at finding ways to trim down that square footage to make it more affordable.
            Owner
            Grind Modern Burger
            PostModern Brewers
            Boise, ID

            Comment


            • #7
              Those are interesting ideas. We are actually a production based brewery. We will have a 15BBL system with 4 30BBL ferm and a 30BBL brite tank.

              Our city is new to the Growler and Pint law. Somewhat difficult to forecast. Its hard to decide on spending more on the building or rolling that forward for profits in year 2 any beyond.
              Adit Kalra
              612Brew
              President/Co-founder

              945 Broadway ST NE, Suite 188
              Minneapolis, MN 55413

              www.612brew.com
              I'm thirsty already!

              Comment

              Working...
              X