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6 Key Questions to Ask Before Taking out a Restaurant Lease

The restaurant sector is predicted to grow by about 10 percent this year.


According to the Business Outlook 2016 report, the restaurant sector is predicted to grow by about 10 per cent this year. This all stems from a stimulated restaurant buying market where operators are feeling confident enough to expand – albeit with the turbulence of Brexit.

Taking out a lease for a new restaurant is where it all begins, and our restaurant property agents are the most experienced in London. Here are six questions to ask before you sign on the dotted line.


1. Who is the landlord?

Are you going to be dealing with a large institution, a bank, a professional property dealer or an accidental or one-off landlord?

It is important to bear in mind that larger institutional landlords can work much slower as various committees sign off on every stage of the process. However, smaller landlords may not react so quickly to issues once the lease has been signed.


2. Where is the landlord located

A local landlord is usually more accessible, and much easier to contact and quicker to react when dealing with any problems after signing the lease.

Similar issues arise in relation to the property manager. Property managers who have several sites, located all over the country, can often be hard to reach.


3. What is the building’s history?

An older building may require significant maintenance, and you may end up footing some or all of this bill.

Try and find out what costs have been incurred in previous years: unlike the financial markets, in the property market, past performance is a fair guide to what the future may hold.

4. What is the leasing history?

If you can find out who the most recent tenants were – and when they moved in and out – you can get an instant way to highlight any potential danger signs.

Better still, if you can approach them you can get an insider’s view of just what running a restaurant in this area and building was like. This first-hand information makes for vital business intelligence.


5. Is the building up for sale?

Finding out about your current landlord and their tenants is meaningless if the building is likely to be sold to a new landlord soon. Commercial buildings are often not advertised for sale in the conspicuous manner that residential properties are.

It is not that there is something wrong with a building being sold – it’s just that it adds a rather large unknown factor into your tenancy.


6. What is your responsibility?

Commercial properties, including restaurants, typically require the tenant to pay a portion – or all – of the property’s expenses. These may include maintenance, repairs and utilities for shared areas, parking lots outside, security, insurance, property taxes and property management. It is important you understand what your share of these pro-rata charges are.

Similarly, you must be clear about exactly what condition your premises will be delivered in. This is particularly the case with new buildings where things you expect to be included as standard may not be actually considered to be part of the landlord’s responsibility to deliver.

The devil, as ever, is in the detail, and these details may include such seemingly basic requirements as the HVAC system, sufficient capacity from the electrical system and modifying the fire sprinklers or ADA accessibility.

While much of the above will be obvious to storied restaurateurs, ensuring you have considered each of the above points before pursuing a particular lease will help you make a financially sensible, smart decision.

With our expert knowledge of the restaurant sector, we guarantee we’ll help you find your perfect next restaurant space. Contact us today here.

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