Percentage Leases Can Help Turn the Economy

We all read the headlines and feel the effects of the decline in all markets from stock to real estate. We have all but lost confidence in investing in stock, real estate and even bonds. But have we given up on investing in people, if we lose confidence in the American entrepreneur then we have a longer road then expected.

Commercial landlords across the country are also feeling the effects through lower lease rates and higher vacancy. Most landlords sit and wait, hoping the sign out front will attract the next business owner through his or her doors. With so much inventory it is truly a waiting game. Have landlords given up on entrepreneurs in America? After all are they not themselves in the same category?

With so many losing jobs and seeking to start up new ventures and the many small business owners that are ever changing their business model to compete in this market, landlords must recognize their drive and partner with fellow entrepreneurs to dig ourselves out of this mess.

So what is a percentage lease and how can it help? As opposed to collecting full rent every month a landlord in exchange will accept a percentage of the business owners profits and a reduced rate. In some months the landlord loses while in better months the landlord realizes more income than market rent would allow. This can be just the arrangement that a small business owner needs. We all know that rent is one of the biggest overheads that an owner faces and cuts into other areas like marketing and payroll that can impede growth. In addition, small business loans and most forms of commercial financing are unavailable to many small business owners and a percentage lease can help. These are trying times and creativity, ingenuity and teamwork will restore our economy.

If you are a motivated business with a detailed plan that lacks start up capital or you are an area landlord that would entertain the idea of a percentage lease contact Ryan Richmond, a real estate consultant with GVA Detroit at 248-470-8533 for more information.