difficult leaseing decision. help with tenant mix.

I want to put a subs and salsda only store next to a coffee shop/luncheonette without hurting their business. subs has no breakfast or coffee, only limoted menu and salads and sodas. Corner strip center near mall, high volume ares, buststops etc. coffee shop says he does not want any other food vendors. I have the right to choose, any opinions.
In Leasing Property - Asked by doug s. - Apr 21, 2011
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Answer(s)

Rob B.
Chandler, AZ

Doug....
As an leasing agent or as an owner it is always a test of skill to put the right group of tenants together in a small center. You should be careful not to be the wrong kind of competing businesses together. However, there are those that fall into the category of "the right kind of competing businesses". Those are compatible businesses that can help one another and also help draw customers to the center.
In the case of your example, I believe the current coffee shop is simply being selfish and unreasonable. If you indeed have no restrictions in their lease, I would say go for it!
However, there are a few caution signs. What is the term of the lease with the coffee shop? What is the rent they are paying? And, how likely are the to move at the end of their lease? If there is enough time left on the lease the coffee shop will likely find that the new tenant is not the danger they envisioned. If there is a short time left on their lease then you must measure the risk of losing them against the gain of the new tenant and the commensurate costs of placing the new tenant in the center.
Onward and upward Doug..... Rob Baird, CA RE License #544165 (One of the oldest, active licenses in CA) 951 515-5855 Email: rob@capratecommercial.com

Apr 21, 2011
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Chris R.
Broker/Agent
Denton, TX

Of course it is always preferable to have happy tenants - it would seem that the proposed tenant would not create any problems for your existing tenant and may serve to increase his business. Take a look around - where you find a Walgreens you find a CVS. Where you find one grocery store - you find another. Where you find one gas station - you find another (or 2). Where you find Wal-Mart - you find Target. There is a reason for that. If your existing tenant has no limitations - then I'd say sign the tenant up.

Apr 23, 2011
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