NRF Presentation Bullet points January 2011 (ver2)

SOME OF THE CHALLENGES FACING FOREIGN RETAILERS OPENING IN THE USA

1. Real Estate/Property/Broker

Trust your Broker.

IntegrityObjectivityUnderstand possible conflicts(In most transactions your broker is compensated by the Landlord!)

Be aggressive in negotiating economics AND landlord work

Landlord Capital contribution, Rental economics and rent commencement dates are all negotiable

Pay close attention to Lease exhibits.

Understand ALL possible hidden charges in the lease

2 Store Design

Survey before you sign lease

Invest in a thorough field survey/Know the details of the space you are leasing.This will mitigate expensive and potentially time consuming unknownsAllows anything discovered to become negotiable

Plans must synchronize with lease exhibits

Plans must be detailed and accurate

Know your permit/approval time lines

3 Contractors/Vendors

Building in the USA is often an adversarial process.While the market place will determine the contract cost a successful budget can only be achieved if the “variables” are managed correctly

Competitively bid all components, Lighting, Flooring, IT, Signage, fixturing etc..

Be proactive with requests for additional money from contractors.

Never pay for work not completed

Be diligent with collection of Lien releases.

(Failure to comply with this requirement CAN DOUBLE the cost to build)

Summary

The Property Broker, attorney, Architect and engineers need to be managed and on same page.

Otherwise each will have their own version of the Clients goal.

Do your homework before signing a lease.

A bad RE decision can kill a new concept.

Hire experienced professionals with integrity

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