Splitting Build Out Costs Between Renter and Landlord?

Question

I'm an experienced small business owner, but for the first time I am moving into a rental space that requires some serious build out expenses, for a restaurant. Can anyone give me a feel for which of these items is appropriate and not appropriate to ask for? Of course, I want to minimize the impact on the monthly rent. The place was formerly retail, so a lot of work is needed. Here are some items:
(a) Run gas line into what will be the kitchen area
(b) Provide at least one floor drain in kitchen area
(c) Build two walls to separate kitchen
(d) re-carpet area that will be dining
(e) tile restrooms to meet local code
(f) tile kitchen area (required for rest. code)
(g) upgrade electric as needed to support needs of the space

I feel at bare minimum that a, b, c, and g should be provided at no impact to the sf lease price and I think d is fair since the place has not been occupied for 5 years. I am already going to have to pop for the exhaust system installation.

Also, if there is anything else you think I can ask for those suggestions are welcome as well.

Landlord · Accepted Answer

Normally the tenant pays 100% of everything on your list.    You build to your needs, they rent you the space, as is.

You are going to be disappointed if you think they will invest this and not raise the rent substantially.

Frankie · Answer

E. That would likely have to be done no matter what. Other than that, the changes are all to suit your needs so you should pay for them. Usually places are rented as-is. If tenants want upgrades/changes they need to pay for them. Landlord is not obligated to make the changes, especially without raising the rent to help pay for them, and like you said those are expensive changes. Have you even talked to the landlord to see if he wants to change the place into a restaurant?

kemperk · Answer

i may have a wonderful alternative.  DO NOT do this.  Instead, one of my secrets is--
find a dormant restaurant where the LL has a lien on the equipment!   AFTER you have
made it profitable, slowly modify it to your specific needs.. and then,
do the same with the next locale

can guide further; look at my YA bio  email me if desired

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Splitting Build Out Costs Between Renter and Landlord?

3 Answers