Proactive Site Reuse to Enhance Center Potential
You need to identify and pursue
In late 2007, the owners of the three major restaurant chains, informed EBMC's Property Manager for a center managed in Reno, Nevada, that they would be closing one of their restaurants within the next 30 days. This came as a great surprise to EBMC in that the owner had a year remaining on their ground lease.
Also stressing the situation was the fact that the two of their chain restaurants, located next door and in the EBMC-managed center across the street, had lease renewals in process. However, EBMC did renegotiate both of those the leases for extended periods.
Once vacated, the owner wanted to negotiate the balance of their land lease to a "zero" payment. EBMC, of course, wanted the owner to pay the entire amount due. The bottom line is, EBMC negotiated the forgiveness of the rent due, some $100,000 plus in exchange for fee ownership of the building. When the restaurant vacated, taking with them one dishwasher and the booth pads with their logo, all the other kitchen equipment remained.The combine value was in excess of $1,000,000.
Once ownership of the building was finalized, EBMC listed the space for lease as any Broker would do. However, EBMC recognized the most effective way to lease the space and enhance the entire center was to identify the type of tenant that would best suit the needs of the center and, once identified, search for that specific tenant.
The prospective tenant identified was a brewery/restaurant combination. The specific potential tenant identified was Great Basin Brewery in Sparks, Nevada. This potential tenant had longevity, reputation, and a good business. EBMC felt they would be a wonderful asset for our center and EBMC began the process of convincing them that
(1) they needed to expand,
(2) Reno was their best expansion area, and
(3) our center was the best location.
They agreed with the idea of expansion, they agreed with the idea of Reno as the place, but they spent several months going over our site potential versus others in the area.EBMC continued the aggressive pursuit of this potential tenant and eventually prevailed.
In 2009, Great Basin signed a long-term lease and started some $2,000,000 worth of rehabilitation to the building and equipment. They opened mid-summer 2010. Our center has a great tenant.