Property Management for Commercial centers and out of state investors.

[JCnOwasso]

Random topic, but I have a neighbor that has been working to try to open a meat market in Owasso.  Specifically in the smith farm area... even more specific, in a location of a closed franchise.  The location comes with just about everything they need and build out would be at an absolute minimum.  They have the finances needed and one of the individuals has extensive experience in the field. 

The managing company for this area is out of OKC and the owner is located in florida.  They have basically been told that the owners are looking for national franchises only.  It is extremely disappointing to find out that this is happening in my home town.  We want small businesses to start up and thrive, but only if it is a small business franchise of a large business?  I am even more perplexed that they are willing to leave this location vacant rather than having a business open and operating, bringing a different clientale into the area. 

I guess this is the reason why I don't own a massive commercial retail complex!

[rdj]

The lender (if the center has debt) may only allow tenants that are rated or franchises.  Or, only allow so many non-rated local owned tenants.

[Teatownclown]

Random topic, but I have a neighbor that has been working to try to open a meat market in Owasso.  Specifically in the smith farm area... even more specific, in a location of a closed franchise.  The location comes with just about everything they need and build out would be at an absolute minimum.  They have the finances needed and one of the individuals has extensive experience in the field. 

The managing company for this area is out of OKC and the owner is located in florida.  They have basically been told that the owners are looking for national franchises only.  It is extremely disappointing to find out that this is happening in my home town.  We want small businesses to start up and thrive, but only if it is a small business franchise of a large business?  I am even more perplexed that they are willing to leave this location vacant rather than having a business open and operating, bringing a different clientale into the area. 

I guess this is the reason why I don't own a massive commercial retail complex!

Unfortunately the banking crisis that is still hanging over us from the past decade makes lending a primary issue. Owner/landlords want credit worthy tenants that lower the risk of potential future vacancies and increase their ability to refinance in the future. Lenders are requiring that owners have credit tenants or put substantial equity behind any re-tenancy. An owner/landlord often finds himself replacing a small business loan by providing tenant finish out out of his own pocket increasing his risk even more. If the tenant cannot come up with the necessary funds to complete the space requirements for opening he must seek a bank loan or a flexible owner/landlord. Real estate professionals are now catching up with capital intensive requirements for deferred maintenance making it even more difficult to put additional cash into space requirements. Easy term loans from the past decade are now rolling over and owner/landlords face putting up substantially more cash equity to get new financing.
National credit tenants can sign leases and build out space from their own pockets while getting a lower rent number as a result.

[JCnOwasso]

You make a good point TTC.  I guess I was more surprised that something that had the appearance of being home town proud was managed by a group out of OKC and financed by some union's retirement fund out of Florida.  But I want to be clear that they have the capital to buildout and make expenses for a while, it was extremely low risk for the property owners.  The owners actually provide 60-90 days of rent free buildout accomodations, which would have not been needed since the previous tennants left all the fixtures in place.  They basically needed to paint and install the display case.  The capital they have is not a loan or anything of the like, it is cash in their account. 

Oh well, I guess my wife had such an easy time with her lease that I thought it was a little easier getting things going.  But it is the difference between having a local owner and an owner who doesn't have a defined objective and is out of state.

[rdj]

I would bet its not the owner, its in their loan agreements.  Their hands are tied.

In an urban area like The Pearl a lender typically wouldn't put those covenants in a loan agreement.  However, the addition of credit rated tenants makes financing income property much easier.  While we may not like to see "chains" move into downtown, The Pearl, Cherry St, etc it is actually a good thing from a capital investment standpoint.

[Breadburner]

They want anchor tenants that will bring bodies into the development......