We are so pleased to work with you to find a space for your new adventure. We are here to advocate for you and work hard alongside you to find the right space, connect you to invaluable resources and make your concept a reality. Leasing can be complex but let’s make it fun too!
BEGINNING THE PROCESS
The process of leasing can me a bit cumbersome and more lengthy than expected. Don’t fret!
We are here as your resource and guide. This gives you time to ensure your financing, business plan and internal workings are ready to go once the lease is signed.
Patience is key in this market. Asheville is a booming and exciting place. With population and tourist growth trending upwards, we are seeing a squeeze on space available. It is a highly competitive market for leasing and for hopeful tenants that means you are in a Landlord driven market.
The first step is not to search for space. We will pull a whole team together to make this happen. Here are a few resources, tips and examples to assist you during the pre-lease and leasing process.
STEP 1: CREATE A BUSINESS PLAN & BUDGET
Landlord’s and lenders will ask to see your business plan so it’s best to start early. It is always a worthwhile exercise even if you are financing with cash. We can help you build out the real estate sections of your business plan (e.g. average per square foot rents, average NNN costs, taxes, etc.).
There are several online and local options to assist with your business planning. A landlord will want to a portion of your plan to ensure you have a viable business before signing a lease.
Mountain BizWorks is a great resource if you’ve not already started a plan.
STEP 2: FINANCING
This is the most important step in the entire process. This is what will hold the whole deal up!
When you find your dream space, the first thing the brokers and landlord will ask you is: what do you plan to do and how will you pay for it? So… before looking for property, get clarity on whether you will be leasing and up-fitting with your own cash, someone else’s cash, or you need to finance this project with commercial lending. If you are using a lender, start the process early so you understand what documents they will need for you and how long their process will take.
If you need lender recommendations, please let us know, we will be glad to help you find the right fit. You can arm yourself with that information upfront and create confidence in the lease negotiations.
Mountain BizWorks is great for start ups.
Carolina Alliance works with conventional commercial loans: Ragan Ward | rward@carolinaalliancebank.com
First Bank: Chris Youngblood | cyoungblood@localfirstbank.com
National Capital Investment Fund: Erika McGilley, Western North Carolina Business Lender | (828) 702-7412 emcgilley@conservationfund.org
SBA Loans: Michael Byers with First National Bank.
Click here to learn how SBA Loans work.
STEP 3: STATE & FEDERAL AGENCY CONSULTATION
You will need permits based on your specific use.
Please visit the appropriate departments and begin the process of gathering the cost and timeline of those permits.
There are lots of resources for you. For example, if you want to start a restaurant in the City of Asheville, check out this handy guide below.
STEP 4: REAL ESTATE BROKER CONSULTATION
When you have an idea of your budget and space needs from a regulatory perspective, let’s get together and game plan the property search. We need to know your expectations of the space so we can help you find it.
STEP 5: GENERAL CONTRACTOR & ARCHITECT CONSULTATION
As you build your team for this project, think of engaging early with an architect and/or general contractor if you will be building out your space. They know the building codes and permits you will need to navigate. These professionals can save you from making costly mistakes or ill informed assumptions about how you can use your space.
Click here to check out our preferred vendor list.
STEP 6: LOOK FOR SPACE
We will use all commercial listing platforms to begin your search and will overlay that with local off-market properties. There is not one consolidated resource for commercial searches so as a team we need to keep our eyes and ears open for all opportunities! Our suggestion is to cast a wide net, see what’s out there and adjust accordingly. Keep an open mind.
When you like a space we have sent to you we will coordinate with you to set up showings. Typically, the landlord or their listing broker will also need to be there to let us in. Everyone is busy these days but we will make it happen!
When you find a space you think may work for you, we encourage you to get your GC, architect and business partners to see it as soon as possible.
STEP 7: LEASE NEGOTIATION
Stage 1 of Lease Negotiation
It is on the proposed tenant to make the first move with the landlord. The tenant’s broker will prepare a short Letter of Intent that serves as a jumping off point for negotiations with the landlord.
The letter states your expectations of the terms, outlines tenant/landlord costs and responsibilities, delivery of the premises, rent payable and any concessions you would like to ask for.
The landlord will review this with their broker and the letter will be negotiated until in an agreed form. At this point both of you will sign the letter but it is non-legally binding. Until you sign the final lease…. Anything can happen!
Stage 2 of Lease Negotiation
The landlord will issue a draft version of the lease for you to review. This is a longer and more detailed document which will include all terms, timelines and responsibilities previously discussed.
It is best practice to have an attorney look over the document before you sign. Your broker and attorney can negotiate any last important details on your behalf. Until the lease is signed, don’t spend any money – you still don’t control the space.
Set up your LLC and business bank accounts, if needed. You can do this yourself via the North Carolina Secretary of State’s website or employ an attorney to do this for you. This is a good opportunity to put any operating agreements or partnership agreements into place.
STEP 8: LEASE EXECUTION
You will usually sign the lease and any other documents (e.g. personal guarantees) with your broker.
Once the lease is signed, you will pay over the security deposit, first months rent and obtain insurance for the space. These all go directly to the landlord or landlord’s broker.
The landlord typically signs last and it is only when the landlord signs that the lease is complete and keys will be handed over to you.
You will need to ensure utilities are in your name if they aren’t included in your lease rate. You can also begin your lending process.
STEP 9: APPLY FOR PERMITS & LANDLORD/TENANT UPFITTING
Apply for Permits
We suggest that you involve a qualified General Contractor and/or Architect to assist you with the building and zoning permitting process.
If you choose not to, that is ok, but please understand there is a process with the local municipality that you will have to navigate. Engineered drawings or architect stamped plans are often needed. A good GC or architect can save you a lot of time and stress.
Permitting and zoning rules vary depending on where the property is located. Often larger cities will have more rules and regulations than more rural areas.
Remember! You’ll need a sign permit as well.
Landlord Work and Delivery of Space to Tenant
With new construction or a building that is in a shell condition, the landlord often has to complete certain key work before the tenant can move in or begin their own up-fit. If this is the case, you will still have access to the space and can work on your own planning, permitting and lending during this time.
When the landlord’s work is done the space is deemed “delivered” to you and you are now in the driving seat!
Landlord Consent & Tenant Upfitting Work
Typically, your landlord will need to approve your contractor(s) and your design/plans before you can submit plans to the building department for review.
Throughout your lease you will need to seek landlord approval for any changes you make to your premises. Good communication is the key to a successful landlord and tenant relationship.
After you have your lease, the landlord is out of the space, and your permits are in tact and up to date, you can begin your work in there!
FINAL STEP: OPEN FOR BUSINESS
This is our favorite part…we look forward to your opening day!
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