May
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As a new business, can I get a retail / commercial lease in my LLC name, rather than my personal name?
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I have no experience with this whatsoever. Is it possible? plausible? Do you have any tips or tricks to recommend in negotiation of my lease? It’s my understanding that many landlords will give “free” rent and build-out reimbursement …. my end goal is to NOT lock myself in PERSONALLy for more than 1 or 2 years (max) until my business venture is proven to be successful.
Thanks.
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4 Comments
May 18th, 2010 at 9:08 pm
You will probably be required to give a personal guaranty. Landlords are not into taking risk on your new business.
You might get some free rent and an allowance for build-out, but that usually means a 5 year commitment.
May 19th, 2010 at 12:58 pm
It appears that you want to use your LLC to avoid personal responsibility for a lease, should the business falter. That won’t work. Landlords are willing to put the lease in the name of the LLC, but will also want an accompanying personal guarantee from you.
May 19th, 2010 at 1:57 pm
Our lease is in our names and not our LLC. I don’t know if that can be done, but that’s not how we’ve done it.
Build-out reimbursement is also known as TI (tenant improvement) and will most likely depend on the length of loan and what is existing already in the space you are considering. One of the buildings we are in we got no TI or free rent, this was 5 years ago though when the economy was much different. The space had previously been occupied by another tenant and our modifications were relatively minor. We had 30 days for construction before we started paying rent.
The location we are currently working on getting open was a brand new strip mall and the space was what is know as “gray shell.” That is, there was no plumbing, no electrical run, no walls, nothing. Seriously, you walked in and you were basically on gravel looking at metal studs. For this space we got a TI allowance of $30 per square foot to bring it to “vanilla shell” (walls, floor, plumbing, ceiling, HVAC, electricity). We have 60 days for construction and then we negotiated 60 days of abated (free) rent to bring down the overall first year of rent. For both of the spaces I’ve mentioned we signed 5 year leases.
May 21st, 2010 at 2:50 pm
yes this is possible