Question for club operators/managers

[RandomFence]

I've been given the green light to seek out a permanent (well... leased) location to put the club at instead of sharing space and getting screwed around with. A location that will be ours and only ours. However I've never done any property dealings before aside from renting someplace to live. Leasing commerical (<--assumption) space is a new ball game for me.

I would be eternally grateful if some of you with experience finding locations like this or who run clubs and have been through this could give me some pointers, do's/do not's, and any information you think would be useful or would have been useful when you were putting your clubs someplace like this.

I'd love to know what I'm in for on this ride and what the club can expect during this experience.

Thanks in advance

[hpfencing]

It's really not a lot iffent than buying a house.

When we started looking I when through the phone book and called all the local real estate people and asked for com. rentals.

I ended up with a place quite different than we were originally looking for becuse of all the options the different agents showed us.

Another option is the local newspaper or something like the Thifty Nickel they were helpful as well as they had a lot of listings.

Anyway I hope my 2 cents are helpful. Good luck.

[RandomFence]

Thank you sir, I appreciate the information.

Anyone else?

[wgreen]

I have just finished going through this process, and have to say that it has not been at all pleasent. I was looking for a relatively small space for a small salle - under 2000 square feet - and went through 6 real estate agents, none of whom delivered what they promised, and all of whom just disappeared after an exchange of several phone calls. If you are looking for 7-10,000 square feet, the point at which it starts to make them enough money to be worth their while, you may have better luck. One particularly loathsome individual strung me along for two months with space that would be ready soon - he was just using me as a leverage point with other renters to get them to commit, as he had no intention of making the changes I needed to the space.

The second part of this is price - retail space is very expensive. Expect that good locations will run as high as $35 a square foot a year, with older strip malls in the $10 to $18 range. Office space in my part of the country is much more reasonable, in the $10 to $15 a square foot. And finally warehouse space (and you can find some with a small office with bathrooms and with air conditioning) is the most reasonable, in my area in the $4 to $10 a square foot a year.

The third part is who pays for what. Rent is not just rent. There is the quoted price for the floor space. Then you need to ask about the added costs, typically called triple net or consolidated area maintenance - that will typically be an added 10% or so. Then the next issue is who pays the utilities, and this can be a considerable cost, especially for heating and cooling. Then who pays for maintenance and what is covered in that maintenance - for example, where I am now I pay for windows broken, no matter how, but my landlord pays for plumbing and electrical problems. Others rent on the basis that anything below the roof is your responsibility. Add all this up and it can be as much as double the cost of what is originally quoted as rent. So as the questions ...

The next interesting issue is what can you do with the space? In some cases, anything you mount on the wall becomes a permanent improvement that now belongs to the landlord. Make sure you understand the ground rules.

Obviously, the prices I have quoted are very relative based on the economy in your area, and even where within your area you want to locate.

Finally, make sure you understand the zoning laws in your community - talk to your local zoning office in city or county government. I was approved in a M-1 (manufacturing zoned parcel) because M-1 includes R-1 (light industry) which includes B-1 (local businesses) which include under rule 13 studios for artists, sculptors, musicians, and teachers. That series of determinations required the county's zoning administrator and the county planning commission chairman's determination - luckily I caught both of them in the office.

[gladius]

Wgreen:

This is what I call a comprehensive and useful explanation. Bravo and thank you from anyone considering such a step.

If the question is not too personal, what did you end up with in terms of space, upgrades/remodeling, etc.?

[edew]

Let's see. I've been through this as well very recently.

Skip using any agents (other than the listing agent, who represents the seller). If possible, skip that agent as well. They're just firewalls between you and the owner. Both you and the owner have a vested interested in getting a deal done. The agent just wants one that is beneficial to him (which means a high rent).

Depending on your area, your lease can be pretty good.

There are three different rates, triple net (NNN), gross, and all-inclusive.

Triple net means in addition to paying the rent, you are also responsible for a share of the taxes and other improvements and such. The owner will have to provide you with what that amount is, usually as amount/sqft. So, if you rent $1/sqft triple net, you'll ask for the operational cost and it might be $0.15/sqft which really makes your rent be $1.15/sqft. The only difference is that you don't necessarily pay that $0.15/sqft on a monthly basis. That amount may also go up or down over the course of a long multi-year lease. (All rents here quoted are hypothetical and monthly rates. Times-12 for yearly rates to compare.)

Gross means the rent amount is what you pay. You are then responsible for gas and electricity and possibly water and certainly waste diposal. This is more akin to an apartment rent.

All-inclusive means even the gas and electricity and waste and water are all part of the lease.

Generally, triple-net < gross < all-inclusive. But, depending on the area and the size and how you negotiate, you might be able to get a decent overall rent. Basically, you need to calculate what your overall monthly expenses will be. They are, for the most part, rent and utilities. Just lump all the fencing related expenses on a fencing sub-category. (This includes wages, equipment purchase, marketing, etc.)

When negotiating, and depending on the state of the rental situation in your area, you might be able to wrangle a pretty good deal. Don't ever expect to go from triple-net or gross to all-inclusive. No owner will go for that because there's no upper bound on your utility usage.

All-inclusives only occur in general retail stores and business office parks because they know how much energy will be used (or, because the all-inclusive only includes waste disposal, and the owner has a big stake in waste generation, he'll take the brunt of the cost and might bump up your rent appropriately to take a bite out of his waste disposal cost).

Now, fencing clubs generally don't generate too much waste. Nor use too much electricity. So gross or triple-net is the best way to go. I generate very little waste. I bring the garbage back home with me once a week and dispose it with my residential garbage, with room to spare (we recycle our lint to make new sweaters and grind all food wastes into little bits and high-pressure compress them into protein food pellets for the pets).

Look for a good sized place. 2000 sqft is not very big. It looks big when empty. Add five or six people in there with 3-foot long metal sticks in their hands and suddenly the room feels very small. Look for nothing smaller than 2400 sqft and with appropriate dimensions. I'd say at least 40' on one side. (So, 40 x 60 is about as optimal as you can get.)

Don't forget to add room for changing areas, sitting areas, equipment storage areas, maybe an office area and such.

Now, before you go sign the lease, you need to work with the city. You need to (in this order, more or less):

1) Get a fictitious business name
2) Submit a proposal to the planning commission (via the planning department) for a conditional use permit. Generally, the space you're going to rent isn't already a fencing club, or even possibly a martial arts studio. So, in order to use the facility as a fencing club, you need to have it approved based on zoning laws, building codes, parking usage, accessibility (ADA rules and children accessibility) night-time usage etc.
3) Get business license
4) Get signage approval

Oh, you'll need to pay fees at each of the 1 through 4 steps above. Depending on your city or area, the fees could be very small to none to quite substantial. Given that our federal government is shot to hell in terms of finances, the cities have to fend for themselves (while tithing the federal government) and will most likely be charging up the wazzoo in fees. If you don't pay, the owner won't even go there, unless it's some shady operator, in which case, you won't go there. If you managed to do get the place without doing 1-4, and the city finds out. You're out of there and you'll be paying fines probably triple or more than the amount and you can pretty much see having a fencing club in that part of town dead for about a decade or longer.

After you get the place, you need to put in a floor. Most places are either concrete floor or carpeted floors. There are almost no places anymore that have wooden floors. Maybe gymnasiums, but even some of those are moving to a synthetic flooring. Out here in CA, plywood is going for $30/sheet of 4x8 (3/4" thick). If you plan on putting plywood, you need to make sure that there's water insulation between the concrete and the wood (or you'll get wet-rot), that the wood is securely fastened to the floor, probably on top of 2x4s, and you'll probably need 1" thick plywood. Anything thinner and you might see a hole in the wood after a hard stomp. Maybe not in a few days or month, but maybe after three years or so.

After all that, start looking for a new place or start planning on renegotiating rent about 1.5 years before the end of the current lease. You don't want to be stuck kicked out of your *** 3 months before the lease expires. All the above takes a long time to work through.

[gladius]

EDEW:

Your posting is even more comprehensive and informative than the previous one by WGREEN. Thank you for sharing your experience. In the end, how many strips do you have and how many fencers does your club accommodate? Any possible discussion about the economics?

Is there anyone else willing to share their experience in setting their fencing club? Thank you!

[edew]

No, that's for you to find out when you do it.