Landlord Relations

When the Dead Kennedys sang “Let’s Lynch the Landlord,” they may have echoed the sentiments of many skateshop owners, but then again, perhaps singer Jello Biafra was merely bitter about his inability to cultivate a positive relationship with his own landlord.

Skate-shop owners should understand that it is the goal of responsible landlords to establish working relationships with merchants that are beneficial to both parties. The landlord doesn’t want a vacant space, and the merchant doesn’t want to be sucked dry by high rent, common-area charges, marketing fees, and other perceived “hidden costs.” A good deal can lead to greater profitability for a merchant, but in order to get that good deal, the merchant must understand how to work with the landlord.

For skate-shop owners who are already on bad terms with their landlords, this may seem a case of “too little, too late,” but usually something can be done to repair a working relationship.

When shopping for a location, one option is to call a leasing agent, who is responsible for negotiating the rent, terms of the lease, and other charges. An agent will have several questions for any potential merchant. Before meeting an agent, however, put together a business plan, financial statements, and an idea of how much you can budget toward rent.

It’s also a good idea to spend some time at any potential location before contacting the agent. Check to see if it’s well kept, contains other businesses that are complementary to a skate shop, has a high or low vacancy rate, competition in the area, and what its proximity to skateparks and schools is.Once the location has been thoroughly researched, give the leasing agent a call. Inquire about availability of space in the center, and if possible, arrange to meet with the agent on-site to walk through some of the vacant spaces. A leasing agent can learn a lot about a potential merchant from this meeting, so dress respectably and be on time. Treat it like a job interview, and make a good first impression.

Besides the basic rent, find out about other fees such as common-area charges, real-estate taxes, insurance fees, marketing fees, and utilities. If interested, the leasing agent can put together a proposal for a merchant to review. It would be a good idea to figure how much the proposed first-year sales will be. If the total rent to the landlord exceeds twenty percent of that figure, look around more unless there is absolutely no other alternative. There are still a lot of costs for a business before profit is made, such as paying for goods and labor. Rent shouldn’t be slowing a business down before it even starts.

When looking for a good merchant, the landlord has several goals in mind. Property owners want to make a certain amount of money, and have a merchant who pays on time and adds value to the center by maintaining a clean and attractive store. By understanding the needs of a property owner, a skate-shop owner can establish and maintain a healthy working relationship that will benefit both parties in the long run.