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TOPIC: lease

lease 06 May 2007 15:48 #14971

  • slapintheface
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I am looking at a 8 screen theater and the landlord is looking for $23,000 per month
4 screens seat 160
4 screens seat 260

GOOD LOCATION IS THE RENT TO HIGH OR ABOUT RIGHT!
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Re: lease 06 May 2007 18:17 #14972

  • rodeojack
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The big questions, at least in my mind, have nothing to do with capacity, though those sizes seem manageable.

Where is the theatre? Is it part of a business mix that attracts people to the area? If it's by itself, does it have good parking, and is it close to other places that people would want to be, or are there bars, casinos and non-family-friendly activities going on that might scare away your younger customers?

Is the $23,000 the check you'd write, or is that based on a NNN lease? You might be adding a lot of common-area maintenance and insurance costs to that amount.

Why is the theatre available? If it was worth that kind of money, wouldn't the previous owner still be there?

Then, add all the other issues that we talk about to death around here... competition, print availability, population, etc, etc, etc.

Are you going to have to do a lot to make the place habitable?... like seats, wall coverings, screens, carpets, booth and concessions gear? Paying all that off, on top of the rent mike make it tough, unless you've got a hot property that people are waiting to buy tickets at!


The 4-plex I had was running at $13k, and was marginal. For an extra $10k, you might have a shot with 8 screens, but geez, that's a lot of money to write every month!!
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Re: lease 07 May 2007 00:37 #14973

  • Ken Layton
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Yeh seems high to me.
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Re: lease 07 May 2007 11:13 #14974

  • slapintheface
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This is in a city and they are asking 10 sq ft ....Would ask for 7 ........ is there a average??
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Re: lease 07 May 2007 11:26 #14975

  • rodeojack
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I'm not sure there's an "average", Slap... at least as it applies to cinemas. As square footage rentals go, a theatre isn't a very efficient use of space. Property managers are bent on getting as much as they can, so I'd guess there isn't a lot of love lost on gymnasium-sized auditoriums that draw 20 or 30 people sometimes.

Rates do vary though. We have a strip mall here that charges the State 80% more for the space they rent than they do for other tenants. I've seen rates as low as $6, though again, you have to watch the NNN charges. Make sure the owner provides annual statements of what those costs are (some states require it). I've suspected some might do a little padding in that area.
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Re: lease 07 May 2007 14:57 #14976

  • Cinemateer
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There is some prime real estate (land only) for lease here that is going for $5/sq ft, and I thought that was too high, but if you're talking about $7-10/sq ft for the property with an 8-screen theater already built and it's in the city, that may be quite affordable. Who knows though- I agree with Jack, I would wonder why it was being let go. (?)
"In a place like this, the magic is all around you. The trick is to see it." -Martin Landau
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Re: lease 07 May 2007 15:46 #14977

  • Mike Spaeth
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The negotiating point is easy: If the rent was affordable, why did the theatre go out of business in the first place?? Maybe a percentage rent deal is in order here...
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Re: lease 07 May 2007 16:58 #14978

  • slapintheface
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This is and old amc house //// seems as if was to small for them,,,
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Re: lease 07 May 2007 20:19 #14979

  • Mike Spaeth
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I'm sure that's not the case. They don't just shut down profitable theatres. That may be the LL's line. How far/how much competition is nearby? Is there a new 24-screen within 5 miles, etc?
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Re: lease 08 May 2007 00:06 #14980

  • rodeojack
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They don't just shut down profitable theatres. That may be the LL's line.

That's entirely possible. However, if AMC opened a newer/larger house in the vicinity, they might have closed the older house and tried to put a clearance on it.

Just something to check on. I'd sure have a chat with your booker or the studios before I committed to anything here. Your adding 8 screens back into the market won't go unnoticed by your competition, whether you make enough to pay the bills or not.
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