should iI allow beer/ wine at store.

I have a coffee shop tennant who wants to add dinner and stay opened later. He wants limited liquor license for beer / wine to be competitive with other restaurants. We have no other liquor licenses on the property. Is there a down side. He feels it would help sales and we are for that. again only wine/ beer.
In Leasing Property - Asked by doug s. - Aug 27, 2011
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Answer(s)

Sam B.
Broker/Agent
Orem, UT

Absolutely. If it will increase his business and get him more income, he'll have a greater possibility of fulfilling his rental obligation and likelihood of remaining there after the original lease term is up. If you disallow the sale of beer/wine, you will encourage him to look elsewhere when it comes time to renew the lease.

Aug 27, 2011
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Chris R.
Broker/Agent
Denton, TX

Overall in general this will help your existing tenant - and - if you have other tenants - will perhaps bring more traffic to the property and get them more business. I don't see a downside. Go for it.

Aug 27, 2011
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Michael B. M.
Broker/Agent
Santa Barbara, CA

Doug,
I see no downside allowing your tenant to sell beer & wine. The idea is to provide your center / property the best opportunities for your tenants to make money which in turn will generate a higher traffic flow, hence higher profit margins for everyone. Furthermore, retail centers are always in competition with each other, therefore if your center provided higher profit margins and you were able to increase rents at some point, this will give you a better chance to keep your center at a competitive standard your tenants and customers demand. Finally, if your profits increase, your NOI will improve which translates to a higher sales price should you decide to sell or at least, provide you with a better LTV ratio for future needs. Note: For every $10,000 improvement to your NOI @ a 6.5% cap rate, the value of your property goes up by nearly $154,000. (NOI/Cap = Value)
Michael B. Marechal, CCIM, GRI, R.E. Masters

Aug 28, 2011
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Jon B.
Naples, FL

It is a great way to increase sales and offer an increased traffic flow for your current and other tenants. You may want to think of outside seating restrictions. Many cities / counties restrict the consumption of liquor in public areas. They may want you to construct some sort of physical barrier that would not be required with a coffee shop. Or prohibit it in public areas all together. Just had a friend run across such a restriction.

Aug 30, 2011
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Timothy H.
Broker/Agent
Monarch Beach, CA

It's a great idea. I would however suggest you add an addendum to the lease which grants him permission for the beer and wine in return that license remains at the premises if he were to leave at the end of the term or assign/ sub let the lease.

Aug 30, 2011
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