Michelle Russell writes:
Hello,
I’m looking for a directory that contains strip mall, shopping center, ect and storage unit owners names and contact information. Do you know where I can find that information?

Michelle, there are a few ways to assemble some of the contact you’re seeking.

Strip Mall Owners: TOUGH, as there are so many of them in any given area. The easiest way is to designate a geographic area and ask a friendly title company rep to give you a printout of the parcel ownership. If you have a larger area, you should probably be thinking about a data provider subscription, like CoStar.

If you wish to establish yourself as a retail expert, a membership in the International Council of Shopping Centers is always a good investment for both education and contacts. The downside is that many of the members own and lease larger centers and strip malls aren’t usually the main focus. Why do you think I started localcenters.com??

Mini-Storage Contacts:

Hands down, get in touch with the Self Storage Association. They are a very active and organized group, and most mini storage owners who have any kind of property belong to them. They have conventions and regional meet ups too. If you want to get to the smaller owners, call ‘em! Often the number on the sign will get you there. Hope this helps a little, Michelle.

Note to you entrepreneurs! Directories for Strip Malls and Mini Storage are ALWAYS Being Requested!

Jennifer asks…
Have you ever come across a strip mall landlord trying to force out the tenants in order to be able to sell the land and rebuild a Walmart type store? Can a tenant have a long term lease for say 25 years? And if so, what would be some of their tactics be?

Jennifer, the ability of the landlord to do that is totally dependent upon the lease terms. For example, if you have a 5 year lease with a 5 year option to renew and you exercise your option, you have a lease. Not only do you have a lease, but normally any buyers are “stuck with you.” Here’s the language from my lease:

35-6. Successor and Assigns. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto.

Now, if I am a landlord and Wal-Mart want to make a favorable deal with me, here’s what I might do to get you to leave:

• Attempt to default you on any permissable grounds, like being one day late on the rent. Depending upon your jurisdiction, I may or may not be successful. In California, the judge would look at my tactics as not acting in good faith. In Texas, he might very well find for the landlord.

• Offer a buyout
• Offer a relocation to another center for the same or better terms

You asked about a 25 year lease. Are you thinking of becoming a “spoiler” Jennifer? That would put you in a very strong position. For a strip mall, however, it’s unlikey that you’ll get a 25 year lease, more likely 5 to 10 years with some options to renew on conditions, for either term.

Homer from Oklahoma wrote:

What is the average cost to maintain a strip mall (each year over a five year period)? What is the typical agreement between the leasee and the leasor ( in terms of: who is responsible for what when something breaks down)? What is the average rent paid for a space in an average sized strip mall?

This is a multi-part question and harder to answer than you may think. Let’s break them down:

Average Rent: The averaged stabilized rent (after free rent and when the tenants have been operating for two eyars or so) for a strip mall depends on several factors, among which are:

• Geographic location and market
  • Guaran-friggen-tee-ya that California is higher than Oklahoma!
• Location within the market
  • Translates into sales potential
• Market conditions
  • We’ve been hit hard here in Northern California, so our rents are generally stable to down from 2007. In Seattle, they’re up

  What matters more than anything else, Homer, is the sales potential. No matter where the retailer is located in the country, the margins are about the same. A sit down restaurant, for example, needs to have a rent factor about 12% of gross sales. So, depending on the average sales in the area, the stabilized rent could be between $18 and $48, with $24 a good medium market figure (but higher in California generally).

Landlord and Tenant Responsibility: This is totally dependent on the lease document. Here are some variants:

• Absolute Net Lease: Tenant does everything including grounds maintenance. These are typically free standing, single tenant buildings.

• Triple Net Lease, Shopping Center: This is the norm for most strip malls 30 years old or newer. The tenant pays his proportionate share of real estate taxes, common area insurance, and maintenance. The landlord takes care of the maintenance and bills the tenant back in the triple net or CAM (Common Area Maintenance) charges.

• Modified Gross Lease: The CAM above is included in the rent, and the tenant pays the increases each year.

Average Annual Maintenance Costs: Impossible to answer without knowing the age, condition, and climate. If there’s snow removal or security, that really adds some cost. In our new strip malls we might spend $6,000 a year for the first five years, and that includes landscaping and general maintenance. In a 20 year old building we might have to start replacing air conditioning at $1,500 per ton, or $6,000 per unit, average. Add painting, roofing, parking lot maintenance and the costs which go back to the CAM can easily be four times that of a new center.

Pick Up Stix, a San Clemente,CA based chain of fast casual Asian restaurants, has shuttered 26 stores in Northern California, Nevada, and Arizona as of January 15, 2008. Apparently there was no notice given to the local employees, according to the buzz on Elk Grove, CA based Elk Grove Online (requires registration).