Choosing a Real Estate Broker I

So you have been planning your restaurant for months and now it’s finally time to look for a location. Where do you start?

How to look for prime real estate?

Every new restaurant owner wants to find the ultimate location. There is one of three scenarios that are desirable to you: high residential traffic, high business traffic or a combination of high residential and business traffic. Depending on your concept, finding restaurant space will be a challenge. If you are looking towards positioning your restaurant in the city’s downtown core, the challenge rises. Unless your concept is so unique, then choosing a location in downtown will bring greater competition, higher rents and low availability of spaces.

Finding prime real estate requires two things:

  1. Patience, Persistence and Aggressiveness from you and your broker
  2. Reputable Commercial / Retail Broker

What should I prepare?

Hopefully by the time you are ready to look for a location, you have spent time carefully constructing a business plan. At this stage, you should have revised and edited your business plan for presentation purposes. Regardless of whether a broker or landlord requests to view it, a plan can offer immediate financial ratios that can determine whether a location’s rent is feasible. You should have a modified version of your full business plan that has been professionally designed and ready to be presented to any corporation, broker or landlord. The modified plan should just contain enough information to present your business concept and overview materials. How you present your business concept can highly influence a landlord’s decision to consider your lease offer.

Are all real estate agencies the same?

Each real estate agency has its strengths and weaknesses. The size of the company, specializations, commission rates, client portfolio should be taken into consideration. There are several reputable companies that can be searched on the Internet. I would highly recommend in networking and seeking a referral to a reputable broker who has experience in restaurant leasing. Realty Advisors such as Colliers International, DTZ Barnicke and Cushman & Wakefield are well trusted companies who can provide resources and commercial insights to new and upcoming developments. These particular companies are often to the first to know of upcoming space opportunities whether a business will soon close or a current owner wishes to exit out of their current lease. Larger companies tend to have inside information that is not listed or made available to the public. Smaller companies may not bring the same commercial retail experience and negotiating power required to help seal the deal.

I have chosen a broker. What’s the next step?

So you have chosen the real estate company who you wish to work with hoping they can help secure a location. The next step is to arrange to meet the team and see who will be your main contact. Don’t be afraid to ask for a higher ranking broker such as an Associate or even the Vice-President of the retail division. The main point to remember is who you work with can make the difference of being able to secure the proper location. Therefore, you want to ensure that your contact is truly working for your best interest. While you meet the retail team for the very first time, you should introduce your concept and the desired locations you wish to open.

There is no policy or law that states you must share your business plan to the broker. There is always a chance that your business plan may land in the wrong hands of others. In the event in which a business plan is necessary to secure a location, you should draft a Non-Disclosure Agreement (NDA) which will prevent the broker from disclosing any information pertaining to the plan other than the retail team itself who will be directly involved in searching your location. This also prevents the broker from sharing your plan to any landlord unless you have given written consent. A lawyer may be helpful in proof reading your NDA to ensure you haven’t missed out on anything.

Stay tuned, we will continue with this discussion in our next post!

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One Response to “Choosing a Real Estate Broker I”

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