Looking for a restaurant space as a new or existing business owner can be daunting. Various factors, such as the location, income levels in the neighborhood and landlord’s attitudes might impact your decision to lease a space for your restaurant. Your first step in any leasing process would require you to understand your needs and requirements.
However, even after knowing exactly the type of space you want to lease, certain restrictions and finding a place in your price range can be challenging. This article provides guidance on how to find a restaurant space for rent or purchase in New York City. If you want to save money on paperwork, contact local New York real estate lawyers that will help you to lease property.
Start with Market Research
As an owner of a restaurant business you want to start looking for restaurant spaces for rent or lease. However, before you start looking, you would need to spend some time on market research. Market research will help you understand the pros and cons of each location that you are considering. Your market research will also help in finding competitors in the area and any unique features common to restaurants in that area. This will help you and your business determine marketing strategies and plan profits and losses as you move forward.
A space for rent for restaurant businesses that seems perfect might not be the best space for your business because of many existing competitors and uninterested residents. This is why market research is an important step that you should follow before signing a lease.
Set Up Your Budget
Before leasing a space, you will need to set a budget range for your rental space. This will help you narrow down areas available in your set budget. It will also help you decide if you want a large or small restaurant space for rent . Some spaces might seem perfect but the rent can be out of your budget.
If you are a new restaurant owner looking for a restaurant space, this will also require you to estimate your cost of starting and running the business. Getting into an expensive lease agreement when you do not have an idea of your profits and losses might be a bad business decision. Therefore, thinking through your budget is a crucial step in the renting process.
What Are Your Space Options?
As an existing business owner looking to buy or rent a new space for your restaurant, you might already know your requirements and deal-breakers. However, if you are a new business owner looking for a space for rent for a restaurant business you might want to lease a 2nd generation restaurant space. These are spaces which used to have a restaurant on their premises. As a result, they already have some infrastructure integral to any restaurant space such as a kitchen. Sometimes these are old restaurants up for sale.
Pros and Cons of Buying an Existing Restaurant
Leasing an existing restaurant space might be a cheaper option as it can eliminate costs of setting up the kitchen. However, there are some disadvantages of leasing a 2nd restaurant space as well. Below is a list of pros and cons of buying a 2nd restaurant space.
Pros:
- Might reduce time spent on opening.
- Opportunity to sign a rent that is below-market value as well as avoid a restrictive liquor license.
- Ability to find and buy/lease a space that might not be permitted today. These would be spaces with a “grandfather status”.
- Provides you access to an existing customer base.
- Might come with hired and trained staff if you take over an existing business which would reduce your cost of hiring and training new staff.
Cons:
- Layout might not fit your needs or design.
- Equipment might not be in great condition.
- Might reduce your ability to negotiate lease terms.
- The initial investment might be higher if you’re taking over an existing business.
- Taking over or buying a restaurant might come with restrictive policies and changes might not be allowed or appreciated.
- The reputation of the establishment will transfer with the sale, sometimes this can have a negative impact.
Should You Hire a Real Estate Attorney For Help?
Renting or buying a space for your restaurant can be a challenging task. While you are making other business decisions, worrying about understanding the lease or purchase agreements might not be feasible. A real estate attorney can help if you are looking for a restaurant space. An attorney would save you time by figuring out the legalities of buying or renting a space. Hiring an attorney might seem costly but can also help you save money in the long term. A real estate attorney will protect your interests and ensure that you are signing a fair contract. An attorney will also eli
“minate any possibility of getting scammed into buying a troubled property that might come with liens and other issues.
Often parts of the lease or purchase contracts can be negotiated. Your attorney will help you with legal advice that will save you money in the deal. On top of that, an attorney might be crucial in ensuring your space doesn’t violate any zoning laws or other local laws.
Yuriy Moshes has focused on litigation and real estate transactions during his years of practice. He has helped thousands of homeowners across New York and New Jersey pursue liquidation options or fight eviction efforts. He has also assisted clients with commercial and residential transactional work such as preparation of contracts. Yuriy is passionate about introducing innovative areas of law to his firm.