Retail Leases and The Greedy Economy

[Randy Bowman]

We had a 10 year lease with two 5 year options. When we leased our current location, it was an empty warehouse that required a complete and costly build out. The property owner happened to be into wine and had bought a vineyard and was thinking about buying a winery and said he wanted our kind of business there. He gave us a great lease for the first 10 years. The next five year lease allowed him to lease it at current market price, about double our current lease on the low side. We exercised our option and notified the owner. He called and reminded me about the current market price and said it would take him a week to come up with a "good" lease because he wanted us to stay. We waited a month to get his response, considering our options, looking at what other space was available and affordable. The best thing we could find was moving next door to an old restaurant for double our current lease and having to do another build out.

We got the new lease papers yesterday and they were more than reasonable. Slight increase and annual increases but no where near what's happening in downtown Napa and up valley. We'll be in business at 5 more years and we have a great landlord.

If you are a Zinfandel drinker, I would appreciate you supporting/purchasing the wine made from my landlord's vineyard. Quid Quo Pro both ways

https://www.ravenswoodwinery.com/2012-R ... axRows=10&

[PeterJ]

Cool Randy. Ravenswood's Barricia Zin was always in the care packages we got from our daughter while she was at Constellation and assigned to Ravenswood maybe ten years ago. We appreciated it all but I specifically remember Barricia being among the better ones, along with Teldeschi and Old Hill. I think they made a Monte Rosso at one time, that was killer, but that's ancient history.

[Michael Martin]

I like your story. I own a business and back in 2010 when RE was in the toilet and lease rates were dropping our building owner wanted to raise our rent. We thought holding the rent was fair, but he wanted more money. We took that as a sign to look at buying a building. We found a bank owned property, that in the end would cost us less than paying rent. So we bought it. The property has now almost doubled in value and we've been paying ourselves rent these last seven years. Other than starting the business, probably our best investment ever. Some things happen for a reason.

[Randy Bowman]

I like your story even better Michael. It sure shows timing is most important and a great landlord is really a lucky find.

[Jason T]

Randy when I opened this thread I expected to see the proposed lease would be a big enough increase that you'd have to consider other locations. Great that that's not the case!