The broker asked for business plan when my first time calling him. Is it normal?

The broker asked for business plan when my first time calling him. Is it normal? We have not entered any negotiations yet? Will the business plan affect my lease rate?
In Leasing Property - Asked by Teresa Y. - Feb 24, 2012
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Answer(s)

Angela M.
Broker/Agent
Mobile, AL

Broker's typically ask a series of questions in the introductory period of a lease in an effort to gauge how organized you are as a tenant. Part of our job is to qualify you as a tenant for the owner. It's a interview of sorts that can work in your favor. Having your ducks in a row in regard to a business plan, capital for the venture and a clear concept for the business will prove to the Landlord that you are a good bet. The stronger the tenant the harder the Landlord will work to court the deal. The business plan may reveal your budget number in regard to rent but that doesn't necessary hurt your negotiation of the space because ultimately the economics will be based on similar comps, strength of you the tenant and other economic elements ie Tenant Improvement monies asked for, Landlord build out and any abated rent periods all of which are factored in and effect rent. They are just checking you out and the better foot you put forward the better your deal will be.

Feb 24, 2012
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Dotene S.
Broker/Agent
Roswell, GA

I believe this is a bit early on the qualification process of your ability to pull the trigger on a deal, but the owner or landlord my request it.. To me, it is a bit early in the fact that he/she have other questions that lead up to that request. Just my opinion!?,

Feb 25, 2012
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Kyle M.
Broker/Agent
Culver City, CA

In my opinion it is uncommon to ask that question right upfront. A business plan is certainly helpful information for the landlord in his decision making process. However initially the landlord is likely to be more focused on the financials for the business, and yours personally if its a start up. Generally speaking the business plan would not affect the lease rate. It could perhaps make the landlord more comfortable in moving forward with a deal. Particularly with a start up , and along with some decent financials.

Feb 25, 2012
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Robert T.
Broker/Agent
Bethesda, MD

Brokers need to know tenants are qualified to lease space and ask a series of questions depending on the nature of the business.

Feb 27, 2012
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John C.
Broker/Agent
Boston, MA

I'd say the second meeting or phone conversation would be an appropriate time for that type of question. "Do you have a location now?", would be more what I would expect. Or possibly "How do your financials look?".

Feb 27, 2012
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John C.
Broker/Agent
Boston, MA

I'd say the second meeting or phone conversation would be an appropriate time for that type of question. "Do you have a location now?", would be more what I would expect. Or possibly "How do your financials look?".

Feb 27, 2012
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Michael B.
Broker/Agent
Las Vegas, NV

Whether it is normal or not - I don't know but the exact correct question to ask, for both you and the broker. Signing a lease is a personal obligation that will bite you if you can't pay the rent. No one wins, including the landord, if you come up short. A business plan, that is thought out with real and conservative numbers, will help you plan your success and help the landlord get comfortable with you and your business. You want that and other documents together BEFORE you start negotiating because any landlord worth his salt will ask you for it prior to finishing your negotiations and any broker worth his/her salt will be providing it to a landlord to prove his/her tenant is someone they want in their building. If your business and financial strength is viable and you can prove it, it should affect your lease rate and lease terms in a positive way. Read also response from Angela M. - she is on the money with her answer.

Feb 29, 2012
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Nadina C.
Broker/Agent
Phoenix, AZ

It's a tenant screening tool. Designed to separate the serious tenants from the "tire kickers". In sales, there is a saying, "always be closing." The better saying is, "always be qualifying." The broker may have been a bit abrupt but you may have caught him on a frustrating day after being contacted by a series of unprepared tenant wannabes.
If you are a business owner and if you are seeking to lease or buy commercial property, you must be prepared to disclose your financial situation and preparedness to a landlord or lender. After all, either one may be your biggest creditor. And being prepared with a business plan shows that you are serious and not just a hobby business.

Mar 1, 2012
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