Steve Benz lost his father to Parkinson’s Disease in 2004. His dad battled the disease for years, and the Benz family gained perspective on the difficulties long-term caregivers face.
With his experience informing him, he saw a need in St. Louis for respite care that would not only be a place for caregivers to leave their loved ones during the day, but a place where adults with disabilities, debilitating illness, or degenerative disease could find real enjoyment and expert care during the day.
In 2005, Benz founded EverLove DayClub in Webster Groves. Open from 7am until 6pm, EverLove provides a nurse and well-trained staff along with intentionally planned activities, physical therapy, and meals for their clients.
Serving approximately 150 families, they work with forty adults a day. Most suffer from dementia, but they serve adults of all ages with various mental and physical disabilities and illnesses.
Their staff dispenses medicine and conducts physical therapy while creating an atmosphere of fun and engagement with arts, crafts, educational programming, personal interaction, and activity.
Steve says, “The human being at every level needs interaction.” While in-home health care provides some of the same services, “It’s not as interactive. This is something that’s really social.” And since they provide care to adults of all ages, “The older people enjoy the younger people,” and visa-versa.
“We love them, they love us. We know [each of] their caregivers by first name.”
Kathy Nohl, a nurse of 30 years, has been working with EverLove for the last ten years. “I love it. I would not do anything else. I love working with [Alzheimer’s and developmentally disabled patients]. It’s very rewarding … It’s like a family.”
However, EverLove’s lease at 524 South Elm was ending, and it looked like they wouldn’t be able to renew it. Benz needed to make a commercial real estate purchase as close as possible to his original property in Webster Groves in order to keep serving his customers.
Calling on Will Aschinger of Hilliker Corporation, Benz began searching for a new home for his valued clients.
Commercial Real Estate Purchase: A St. Louis Search
Benz described his ideal space to Ashinger. First, they were ready to purchase their own commercial real estate in the St. Louis Area. It needed to be near their current location, so they began searching in Kirkwood, Sunset Hills, and Webster Groves.
Additionally, they needed a large open space for their activities along with bathrooms and a break area.
Meanwhile, Ashinger was representing Baker Medical Group (BMG) who had piece of commercial property for purchase at 8969 Watson Road.
Owned by a husband and wife family medical practice, Drs. Greg and Paula Baker had closed their St. Louis practice and moved to Florida. The building, originally acquired for the couple’s fledgling practice by Greg’s mother Janice, had become a second home for the Bakers over their years there.
The Bakers hoped to rent the building out, wanting to hold on to a property that meant so much to them. Having had a promising tenant pull out of a deal at the last moment, Greg Baker called on long-time friend (and Hilliker president) Meade Summers.
Summers referred Baker to his colleague, Will Aschinger, an expert in the area surrounding Webster Groves. Together, Aschinger and the Bakers listed the building for sale or rent.
As Aschinger considered the building, he thought there might be a chance he could bring his two clients together.
He showed Benz the Baker Medical Group building. Though it lacked the open space needed for EverLove’s business model, it had the right number of square feet, and Aschinger had an idea.
Relief for Caregivers—New Hope for Their Loved Ones
First, Aschinger and Benz contacted Jim Mills of Mills Construction to evaluate the building.
They determined that they could open the exam rooms into one large room to accommodate fifty people. This would mean room to grow from their current forty-person maximum space.
But Benz says the real selling point of BMG’s building is its park-like property and beautiful trees. He plans to add a fenced-in patio so participants can enjoy the outdoors, which most of them rarely, if ever, get the opportunity to do.
“It’s almost impossible in any kind of medical facility to have green space,” says Benz, seeing an opportunity to bring a new level of service to his clients.
Here, for seven or eight months out of the year, the adults they serve (many of whom are too often stuck indoors) could get some fresh air, view nature, and enjoy the outdoors.
For Drs. Greg and Paula Baker, though they had hoped to lease the building initially, they saw a greater opportunity in selling it, leaning on Aschinger’s expertise and advice.
Though the building was originally zoned as a medical building, the language didn’t cover adult day care. Benz and Aschinger worked with Mara Perry, Webster Groves Director of Planning and Development, to put together a request to zone it for use as an adult day care center.
Building on the Past—Looking To the Future
In the end, EverLove Day Club purchased the 3234 square-foot building for $585,000. After renovations, they’ll gain an extra 1000 square feet for their business, giving them room to serve ten more clients daily.
Benz now has control and ownership over his own property, which allows him more flexibility for the future.
As the Supervising Director and Nurse, Nohl looks forward to the move. “It’s got the outdoor space we can use. And we’re moving right off of Watson Road, so it’s really convenient. We’re excited to be in a stand-alone building.”
EverLove successfully opened at its brand new location on June 3, 2019.
Looking to Make a Commercial Real Estate Purchase in the St. Louis Area?
We’re always looking for creative solutions for our clients. Our brokers have experience in seeing the possibilities in a listing, look for the optimal way to serve you and your business.
If your current commercial lease is coming up for renewal, you’re likely asking yourself questions about your next steps, wondering what it’s like to start building equity in real estate instead of paying rent to other people.
You may also like the idea of increasing your income by of taking on a few tenants while building long-term value for your business. If that’s the case, you’re probably in the same situation as most business owners and wondering exactly how to buy commercial property.
Owning your own property offers many rewards, including:
- Budget Predictability: Eliminate the fluctuating costs of certain lease types with a fixed-rate loan.
- Tax Incentives: Take deductions on mortgage interest, property taxes, depreciation, and more.
- Diversify Your Portfolio: Build equity with a real estate investment.
- Grow Your Spending Power: Your property and building is a capital asset, increasing the value of your business, and improving your credit-worthiness to banks and other lending institutions.
- Create Future Value: If and when you sell your business, you can keep the property as an investment, sell it, or pass it on to the next generation.
If you’re wondering if it’s time to buy, here are the questions you can ask yourself and the steps you can take to find the right property for your needs.
Choose an Experienced Commercial Real Estate Broker
Your commercial real estate broker will be your right-hand advocate through the entire process of selecting and closing on a property. Good brokers know how to listen to you and your needs and have a comprehensive knowledge of the area.
You’ll rely on your broker to:
- Match your needs to available property. That’s why capable brokers get to know you to the best of their ability while always keeping abreast of the current market.
- Lend you their experience and counsel as you weigh the risks and rewards of a purchasing a particular property.
- Help you determine if you’re paying the right price for the property in question. We’ll go over all the “comps,” or comparable sales, in the area and help make sure you’re not overpaying.
- Help you negotiate and prepare the contract, structuring a win-win deal. We want to make sure you’re getting the best possible price and protect your reputation in the long run.
- Manage your due-diligence period. Letting a due-diligence item slip through the cracks can be detrimental if you find an issue. We’ll help keep you and your contractors on track.
- Assist you with the zoning process. A competent broker should know how to guide you through the governmental agencies you’re working with, and in many cases will already know many of the officials in a municipality along with the ordinances you’ll need to follow.
Determine Your Location and the Amount of Space You’ll Need
Finding the right place for your business is similar for buying or leasing. You’ll need to ask yourself:
- “Where are we located now?” It’s probably a clue to where you should start searching.
- “How far will my employees, customers, and I have to travel?” Often, when you’ve outgrown your space and are ready to buy, you may have to search outside your current ideal area. As you do so, try to narrow your search to areas you and your employees can reach easily.
If you have fleet vehicles, look for areas with access to major arteries. And if your best customers need to get to your new location, find out where they are and how far they might be willing to travel.
- “How much space do we need?” If you’re having trouble predicting your rate of growth over the next several years, it may not be time to buy property. But if you can estimate what you’ll need, it may be the right time.
Warehousing operations have the benefit of being able to look for fewer square feet if they can find more height. In that case, you may be able to cut down on your footprint, which could be a benefit both to your workers and to your bottom line.
Set Up Financing with a Trusted Bank
First, you’ll need to decide if you’re in a financial position to buy. Remember, without a lease, you’re responsible for 100% of your operating expenses, but as mentioned earlier, that also means a substantial tax write-off for your business.
A great commercial loan officer serves as a valuable member of your team as you start to determine how much you have to spend, including what sort of down payment you’ll need.
If you don’t already have a banker you know and trust, ask mentors who have made similar purchases. Your commercial real estate broker is a great resource as well, and at Hilliker, we have strong relationships with several of the area’s best banks and can help you choose.
Next, you’ll need to determine what type of loan is right for you.
SBA Loans only require 10% down. However, you’ll have to do a lot of up-front work, complete documentation, and fulfill other requirements, including:
- You must use at least 51% of the property for your company within a year of buying it.
- Your company’s net income (after taxes) cannot surpass $5 million in the two preceding years.
- All parties involved in purchasing the property must prove their personal finances fall within specific parameters.
Conventional business loans have many fewer restrictions and (in some cases) offer lower interest rates than SBA Loans. In either case, you’ll need to speak with a great commercial loan officer to help you make the right choice.
Build the Rest of Your Team
Though this is not a complete list, your broker can help match you up with other vital members of your team as needed:
- A top-notch real estate attorney to help you protect your assets.
Though much of a commercial property purchase will be straightforward and handled by your broker, a real estate attorney can help with any rare or unique circumstances having to do with complicated ownership structures, tenant claims, current leases, or environmental difficulties.
- Architects and contractors to help you calculate the need for and the cost of various improvements and renovations. They’ll help you determine if you’re making a wise choice, help you plan for the future, and suggest opportunities for maximizing your new space.
- A reliable Title Insurance Company, which will complete title research for you and make sure there are no issues. They’ll hold your money in escrow and return it to you if the seller doesn’t uphold the terms of the contract or if a red flag comes up. Great title insurance companies will employ legal counsel to help settle disputes as well.
Count the Cost of Adding Tenants
As stated earlier, an SBA loan will require you to use 51% of your building for your own business, but tenants will help you diversify the risks and rewards of purchasing a building. If you see yourself growing in the future, you’ll be able to grow into your building instead of needing to move again.
However, you’ll need to make sure you’ve evaluated the situation before you dive in. Your broker will help determine the credit-worthiness of the current tenants by checking their references. We’ll make sure to ask for a personal guarantee from both the business owner and spouse, if applicable.
You’ll also need to determine if the existing lease agreements are compatible with the value of the building—as well as your monthly mortgage. You’ll need to find out if the tenants will require you to make any future improvements and factor that cost into your budget.
Be Prepared to Complete Your Due-Diligence
When you’ve signed a contract, you’ll have several tasks to complete on schedule to fulfill the terms of your agreement or back out if you have to. Your broker will help you manage the process, but be prepared to be part of getting several necessary steps accomplished, including:
- Obtaining a loan.
- Reviewing and signing documentation.
- Attending to matters concerning the title, zoning, and survey process.
- Reviewing tenant leases.
- Participating in the property inspection.
- Obtaining insurance.
- Other miscellaneous activities.
Are you ready to start looking?
As a Hilliker broker, I’ve had the chance to help many business owners through the highs and lows of purchasing a property. I’ve been able to watch many of my valued colleagues do the same.
Our expertise includes helping you find the right property, negotiate the contract, manage tenants, and guide you through the entire process, beginning to end.
If you’re getting ready to buy commercial property in the St. Louis area, we’d like to be your first call. Get in touch today.
Chris Taff earned and a Bachelor’s of Science in Business Administration Majoring in Finance with a Minor in Construction Management from Southern Illinois University-Edwardsville in 2009. He then earned his MBA, with a concentration in Process and Project Management, from Maryville University, in 2013. A valued member of the Hilliker team, Chris specializes in industrial real estate and represents commercial real estate buyers, sellers, landlords, and tenants.
Dr. Lindsay Reel graduated from the St. Louis College of Pharmacy in 2006, and has dedicated to herself to working in and managing retail pharmacies. Since entering the field 13 years ago, she’s gained experience at all levels of the business, including as the Regional Director of Retail Pharmacy with SSM.
She recently discovered an exciting opportunity in a growing segment of her business: telehealth.
Projected to be valued at $9 billion by 2022, telehealth provides an Internet-based alternative to the traditional doctor’s office. Companies following this new model employ physicians willing to see patients using Skype-like technologies.
The ability to reach a national scale quickly comes with a problem to solve. Telehealth companies need pharmacies licensed in all 50 states to keep pace with their growing needs, and St. Louis is an ideal location for this kind of business.
As the crossroads of the nation, the city is well-positioned for shipping. Additionally, it boasts a steady stream of qualified graduates from St. Louis College of Pharmacy.
In response to this opportunity, Dr. Reel founded Skin Specialty Solutions.
The new pharmacy formed as Reel obtained an exclusive contract to compound anti-aging and acne creams for Curology, a dermatological telehealth provider based in San Francisco.
With an agreement in hand, Dr. Reel and her business partners went in search of a building to house the company’s operations.
Founding a High-Tech Start-Up in St. Louis
Skin Specialty Solutions set out with very particular commercial real estate needs: a warehouse with several dock doors, lab and office space, and room for fast-paced growth. They also needed a landlord willing to help them custom-convert the space so they could meet stringent pharmacy-licensing criteria.
But they had to move quickly. Beginning the search in late 2018, Dr. Reel wanted to start shipping by April 2019. They required someone who could guide them to an optimal choice, so began interviewing several of the area’s top commercial real estate brokers.
Their search spanned both national and local companies, leading them to Hal Ball of Hilliker Corporation.
KayVee Larsen, Curology’s VP of Pharmacy Operations, helped conduct the interviews. She says, “Hal came highly recommended. Once I interacted with him, I knew he was exactly what Skin Specialty Solutions was looking for: a very effective communicator who really knows the area.”
When Dr. Reel and the team first started looking for real estate, the company believed it only needed about 25,000 square feet. But as the scope of the business plan changed, they knew they would need a building upwards of 40,000 square feet.
By January 2019, they had narrowed their search to two possible solutions. One was in the retail pocket of Earth City. As the parties worked through the details of the lease, they became aware the city would have to change the zoning, putting the deal on hold for approximately three months.
But with an April 2019 shipping deadline, they needed to take occupancy by February 2019. Ball, Reel, and Larsen decided there wasn’t enough time and turned to their second solution.
Skin Specialty Solutions signed a 5-year contract for 48,080 square feet in US Capital Development’s recently built Fenton Logistics Park.
Bringing Jobs and Innovation to Fenton Logistics Park
US Capital Development built the Fenton Logistics Park on land formerly occupied by the Chrysler Assembly Plant near I-270 and I-44. With hundreds of thousands of square feet available for rent, the buildings are rapidly filling up with job-producing businesses.
Skin Specialty Solutions leased a space at 2058 Fenton Logistics Park Boulevard, for which Ball helped negotiate a turnkey delivery at $8 per square foot.
Reel and Larsen knew what the new building needed to be a success, but the timeline was challenging. They called on the experts at M + H Architects and Kadean Construction, who went to work on the project with speed and efficiency.
The result is a beautiful space that meets the rigorous standards of the industry while including many of the amenities tech start-ups are known for: open workspaces, nursing mothers’ rooms, game areas, and even a media room where staffers can play video games.
Deeper inside, the building houses an ample, isolated pharmacy formulation space; a 32,000-square-foot warehouse; and a hazardous drug room outfitted with a specialized HVAC system. Negotiated into the lease, this system uses positive and negative airflow to keep powdered chemicals from spreading through the building.
Positioned for Growth
Currently Skin Specialty Solutions is only licensed in a few states, so the operation has only eight employees. But it is positioned to be licensed throughout the US very soon, bringing between 100 and 200 jobs to the St. Louis area in the space of a few years.
Thanks to a responsive team that included Hilliker Corporation, they were able to send their first shipment of custom skin-care products on Wednesday, April 17, 2019.
A Clear Path to Future Success
Dr. Reel is enjoying her new role and colleagues. She’s able to build a team from scratch, work on the cutting edge of a new field, and help grow a burgeoning business from the ground up.
As she hires new employees, she’ll be able to give certain ones the flexibility to earn their pharmacy license while working at the state-of-the-art facility.
Larsen says, “The Fenton Logistics Park is beautiful, and the space will serve Skin Specialty Solutions well. They’re at the very beginning, but I think they’re going to have some great successes there.”
Creative Team Members for Your St. Louis Real Estate Search
If you’re searching for commercial property in St. Louis, get Hilliker Corporation on your team. Our experienced brokers know the area and can help you find real estate that will set you and your company up for long-term success.
Bimmers R Us: A St. Louis-area Auto Tradition
When Greg Stroud founded Bimmers R Us in 1991, he hoped to create a shop dedicated to providing “quality service by educated and informed technicians, positive customer relations, and prices lower than the dealers.”
Though he loves selling what he calls “pre-enjoyed” BMWs to his clients, his chief motivation has never been “moving metal,” an industry term for merely selling as much product as possible.
Instead, Stroud and his team at Bimmers R Us have concentrated on hand-curating a unique, high-end collection of both pre-owned and vintage BMW cars they feel proud to for their clients to drive.
General Manager Jack Zickrick says of the company’s aesthetic, “We buy what we like. We’ve built our business in a way that we don’t have to just ‘get rid of cars.’ Instead, we want to sell what we love.”
And they’ve been successful doing just that. With a sales and service center located at 3435 Kingshighway Boulevard in South St. Louis City, they continue to seek out what they believe to be the best cars for their customers. And with a staff of mechanics dedicated to keeping BMWs in top shape, they’ve remained busy and profitable.
Their success has led to a significant turning point in the company’s trajectory, allowing them to grow their business while innovatively serving BMW lovers.
Teaming Up to Buy Commercial Warehouse Space with Hilliker Corporation
Bimmers R Us purchased their current location at 3435 S Kingshighway in 2000 through a deal brokered by Ben Hilliker himself.
However, after years of successful business, they found themselves landlocked. Their property was always at capacity with new acquisitions and repairs. To keep up, they added two additional remote lots to store excess inventory.
This wasn’t ideal for a company that wanted to showcase everything they had available, and caused them to lose time, money, and opportunity as they shuttled vehicles between several different lots.
Stroud wanted to find a way to display all of the dealership’s BMWs in one place. Averaging between 70 and 90 cars at a time, he dreamt of a place to keep all his inventory under one roof, protected from the elements and visible to both customers and car lovers.
Stroud and Zickrick, assisted by Taff, decided they needed around 10,000 square feet of showroom in addition to space for sales, a shop to service sales cars, and plenty of parking. Stroud and Zickrick didn’t want to rush the process, only wanting to see properties in St. Louis City that matched their high-end vintage car aesthetic.
Taff says, “To meet Bimmers R Us’s specific vision for the new location, I knew the space had to meet multiple operational needs and include certain design elements.” He scoured the market, focusing on St. Louis neighborhoods that would be a good fit for the Bimmers R Us brand. They toured close to a dozen buildings throughout South City, and the Grand Center Arts District.
However, both parties agreed the inventory available to them would not successfully display all that Bimmers R Us had to offer.
Three years into the search, Taff’s Hilliker colleague Patrick McKay listed a very special building with a storied history. Together, the two of them wondered if it might meet both the technical specifications and artistic sensibilities of Bimmers R Us.
A Historic Business on St. Louis’s Florist Row
The 2700 block of LaSalle in Downtown St. Louis has long been known as Florist Row. Beginning in the 1930s, several floral wholesalers started buying up the substantial warehouse spaces, creating an industry that services flower retailers throughout the St. Louis area to this day.
Eric Kuhlmann, part owner of LaSalle Wholesale Florist and owner of Kirkwood Florist, remembers Florist Row in its heyday in the 1950s and 60s. However, as the business changed, most of the floral wholesalers have moved out.
He said, “When I was a young man, there were nineteen different wholesale florists on that street. Now there are only two or three.”
However, he and his partners at LaSalle Wholesale Florist thrived well into the new millennium at their shop at 2744-2766 LaSalle Street. Their 25,000 square-foot warehouse had been a staple of Florist Row, but as several of the partners reached retirement age, they decided it was time to divest themselves of both the business and the property.
They called a trusted advisor at Jefferson Bank, asking him to recommend a quality commercial real estate broker. The banker recommended Patrick McKay of Hilliker Corporation. After an interview, Kuhlmann and his partners decided McKay was the right fit for their company.
An Innovative Plan
After Taff saw McKay’s listing, he wanted to show it to his Bimmers R Us clients immediately. Zickrick said, “It was a 92-year-old building with plenty of space for a showroom. We like its industrial feel because when you’re into cars, it’s kind of hard not to like the beams, the brick, the really heavy sliding doors, and concrete floors.”
Stroud and Zickrick imagined the warehouse itself as a “curated sales collection.” Part museum, part showroom, they saw it as a potential paradise and perennial attraction for car-lovers.
In addition to the warehouse, the property features a separate building for the sales staff, another building ideal for a garage, and plenty of parking. Stroud, who’s lived in loft spaces throughout the St. Louis area for years, found an added benefit: a space Stroud could convert into a loft just above his unique car collection.
Bimmers R Us, represented by Chris Taff, signed a contract to purchase the property for $675,000 only a few weeks after LaSalle Floral Wholesalers and Patrick McKay listed the properties.
Zickrick said of Taff, “What attracted us to Chris was his patience. He’d drop everything he had to meet us for an hour on many different occasions.”
Kuhlmann says, “With Patrick McKay and Hilliker, it was an enjoyable experience. Closing the deal was smooth as silk.”
The team at Bimmers R Us will keep its current location on Kingshighway for service, but they’re hard at work remodeling the LaSalle location, targeting a soft opening by the end of 2019.
Get Hilliker’s Commercial Real Estate Team on Your Side
Whether you’re selling or purchasing commercial property, the Hilliker team is committed to helping their clients find the best possible solution. With a team of more than 20 commercial real estate professionals, we work together, make connections, and find innovative ways to help you win.
If you’re ready to get Hilliker’s Team of brokers working for you, book an appointment today.
An Unexpected Party on a Weekday Afternoon
In 2006, Lola Kim was walking down West Illinois Street in Chicago. It was a weekday afternoon, so she was mystified when she passed a storefront that was pulsing with music and full of people dancing. A trained musical theater actor and dancer, she had to find out what was going on.
She had stumbled on an Arthur Murray Dance Center, a worldwide ballroom and social-dance training franchise. Founded by Arthur Murray in 1912 as a mail-order business, he created a simple system for teaching ballroom dances, saying, “If you can walk, we can teach you how to dance.”
Ms. Kim became a devotee of the method which teaches twenty-five dances in only ten lessons. She enjoyed participating in the three-part system, which included private lessons, group lessons, and a weekly dance party that engaged students in a real social setting.
She soon became an instructor for the downtown Chicago location. Within six months, she was promoted to the center’s Manager. Overseeing every aspect of the operation, she hired and trained new instructors, ran the payroll, and made sure the location, one of the top 5 worldwide, remained profitable.
After 12 years leading the studio, she was ready for a new challenge. Arthur Murray International asked her if she wanted to bring a franchise to the St. Louis market. As a native of the region, it was an opportunity too good to pass up.
With support from Arthur Murray International, she needed to lease retail space in a part of St. Louis that would be convenient for students as well as provide enough room for dance classes.
The Search: Finding Retail Space for Lease in St. Louis
Lola and Mark Kim went to work on the project together. Consulting with Greg Russell at Colliers International, they found space quickly in Webster Groves and came to a verbal agreement, but a national company swept in and made an offer the Kims couldn’t compete with.
After that, Ms. Kim spent nearly two years checking listings and driving around town, looking for the right retail space for lease in the St. Louis area. On one of her drives, she spotted the famous Hilliker “Red H” sign at 14334 Manchester Road. The space, at just over 5000 square feet, was the right size.
Nico Properties (owned by Nuria, and Nicholas Citrin) purchased the raw land in 2005 for its retail business, GCO Carpet, with the assistance of longtime friend and broker Frank Yocum at Hilliker Corporation. Yocum had represented Nico Properties’ interests since 1999, completing seven other transactions for them.
They built the building that housed GCO a year later. Though the Citrin family sold the business in 2011, they still own the property and the building.
Nuria Citrin, a part-owner of Nico Properties, said she was looking for a tenant that would pass muster with the City of Manchester’s rigorous business ordinances. However, she was also looking for a business that would complement the existing tenant, Sincerely Yours Bridal.
Also, Yocum and Greg Russell had worked well together in the past. They knew they could negotiate a win-win.
As the two parties began to talk, the Citrins and the Kims saw an opportunity for a mutually beneficial partnership.
Stepping into a New Retail Space
For the Arthur Murray Dance Center, the location is perfect. Situated at a stoplight on Manchester Road just west of MO-141, Wal-Mart and Costco anchor the property. The building itself has glass on three sides with signage on both Manchester and Meramec Station Road. And best of all, more than 50,000 cars pass the high-visibility location daily!
With a truck-high dock and wheel-chair accessibility, the most significant change for the new studio is the installation of a new dance floor. Mark and Lola Kim are working with R L Contracting, LLC, for that and other needed updates.
Partnering to Create a Win-Win
Ms. Kim enjoyed working with both Greg Russell and Frank Yocum.
About Yocum, she said, “Frank’s a solid guy. He was always available when we needed him, to come out to meet with a general contractor, or whatever. We asked a lot of him, and through it all, we found him to very kind, funny and entertaining!”
Mrs. Citrin says of Yocum, “We have a very good relationship. Frank has been our broker since 1999, and we’ve worked with him on every deal since.
Citrin is happy at the match between the two businesses in her building. Besides teaching classes, she sees Arthur Murray as a place “to prepare people for the wedding,” pairing perfectly with Sincerely Yours Bridal. The Kims see the opportunity as well. Mr. Kim calls the situation “just unbelievable.”
Converting the Retail Space into a Dance Studio
Ms. Kim says, “It’s an amazing space. It’s perfect, especially compared to everything else. And our new landlords are great. We believe it’s very important to develop a relationship with the owner. It’s really one of the things we’re most excited about.”
With renovations underway, Lola and Mark Kim are on schedule to open the St. Louis branch of Arthur Murray Dance Center in July 2019.
Retail Space for Lease in St. Louis: Are You on the Hunt?
At Hilliker, we have solutions for you. Whether you need help negotiating a lease for a space you’ve already found, or you’re starting from scratch, we have the expertise to guide you to a successful outcome.
A Yard Overrun by Pests
Laura Strasser lives in Des Peres, Missouri. With two kids and four dogs, she has plenty of reason to worry about mosquitos, fleas, and ticks. More than a nuisance, these insects can carry viruses, so she takes them seriously.
To deal with the problem, she became a customer of a local franchise of Mosquito Joe, a nationwide chain that specializes in eliminating these pests.
After three treatments, Mosquito Joe technicians were able to kill most of the mosquitos in her yard (they estimate 95%). They treat other kinds of properties as well: baseball fields, soccer fields, restaurants with outdoor seating, and others.
As someone who had owned franchises before, Strasser knew a great business model when she saw one. After doing a little research, she decided to invest in three St. Louis-area territories. She needed to find a small office space for lease in the St. Louis area.
Finding Manchester Road Office Space for Lease
With a house in Des Peres and a child in an Ellisville school, Strasser started looking on Manchester Road.
Her needs were simple. Mosquito Joe franchises don’t require much space, and in Strasser’s case, she only needed to find about 2000 square feet to receive shipments and outfit her small fleet of vans with the supplies they need for a day’s work.
She liked Aschinger immediately. “He didn’t start by trying to get me to lease the property I was interested in initially. He started by asking me questions like, ‘What are you looking for? How can I help you find something?’”
As it turned out, the space she called about wasn’t a great fit. But she continued to work with Aschinger, who researched and shared multiple properties for her consideration.
A Prime Location for a Unique Need
They zeroed in on a retail center at 14560 Manchester Road.
Though Mosquito Joe doesn’t need high visibility (they seldom get walk-in clients), the property owners had space for lease behind the building on a lower, hidden level. Situated near MO-141, her drivers would be able to get to the highway without having to fight Manchester Road traffic.
Putting two spaces together, Aschinger and Strasser were able to strike a deal with Hutkin Development Corporation and carve out 1900 square feet of office and storage space. Settling on a five-year lease, Hutkin also performed some light buildout, including adding a water spigot for an outdoor hose.
A Low-Stress Transition
Strasser was pleased with the process, saying, “Will is doing it right. We looked at several spaces. And when we finally settled on this building, one of Hutkin’s owners came out to meet me. I’ve worked with several landlords before, and that rarely happens.”
Strasser says that with heavy rain combined with possible flooding, it may be a challenging year for mosquitos in the St. Louis area. Her team is working to put chemical barriers around properties while educating landowners about how they can enjoy the outdoors this summer.
Strasser and her Mosquito Joe franchise were able to move into the new building and start operations in less than a month, thriving as people begin to prepare their yards for spring.
Does Your Business Have a Unique Property Need?
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A Welcoming Environment for PT Patients
Physical therapist Dr. Hunter Knight, DMP, believes each of her patients has a right to her undivided attention.
At Omni Physical Therapy, she made it her mission to see only one patient per hour. With three private treatment rooms, a fourth room for massage therapy, and two full-service gyms, she and her staff can focus on offering patients one-on-one care, whatever their needs.
An all-inclusive physical therapy (PT) provider founded by Dr. Knight in 2009, Omni has cultivated a welcoming environment, reporting a 99% customer satisfaction rate from a recent in-house survey. With a staff that includes a massage therapist, a personal trainer, and an ergonomist, they work together to maintain a comfortable and inviting space for their patients.
Finding a New “Home”: Going from Rental to Purchasing Commercial Real Estate in Des Peres
However, the medical space Omni was leasing at 1000 Manchester Road (near I-270) was at cross-purposes with Knight’s vision. Though it served her business for many years, she hoped to one day own a building that exemplified the personal care she was used to giving her clients.
Additionally, she no longer wanted to pay the high rent her space required. She wanted to invest in a building and property that would serve her business well into the future.
For Knight, it was time to purchase commercial real estate in or near Des Peres.
Believing that moving too far from her original location could prove harmful to her relationship with her patients, she wanted to stay within a five-mile radius.
Working Together to Build Omni’s Future
The house, owned by Fred Bueler of Bueler, Inc. (a residential design and modeling company), was 3200 square feet and had served as the company’s showroom, warehouse, and office. They purchased the building in 1991 after growing out of two separate rental spaces. Like Knight, Bueler was ready to stop paying rent. He had envisioned the two-story home as perfect for his growing business and made that a reality.
With parking in the rear and a 1600-foot walk-out basement, he worked to turn the former home into a showroom and office. When he decided it was time to retire in 2018, he started asking trusted advisors for a referral to a high-quality local broker.
After several conversations, he called on Will Aschinger, the name that came up more than once.
Bueler says, “Oddly enough, Will and I ran into one another when I was coaching [my grandson’s fifth-grade basketball team].” Aschinger coached his own son on an opposing team, and the two developed a rapport.
Bueler prepared the house for sale: painting the walls, removing his inventory, and making small repairs. At one point, he and Aschinger had the building under contract but were disappointed when the previously eager buyers had to pull out of the deal.
Dr. Knight’s call came at the right time. Leveraging inspections already been completed under the previous contract, Bueler and Knight were able to arrive at a mutually beneficial deal quickly.
Building on Mutual Trust and Integrity
Aschinger, Knight, and Bueler enjoyed working together, each one commenting on the other two parties’ commitment to do what they had promised promptly.
For Knight, her practice is set to blossom now that she is paying rent directly to herself. Happy to be able to take control of her destiny, she’s now building equity in addition to creating her business.
The house works well with the aesthetic, brand, and customer experience she has defined as her goal. As the owner, she and her colleagues are doing half of the remodeling work themselves, contributing to the “personalized” feel of the new office.
Additionally, with a backyard where many of her patients will be parking, she’s eager to get to work doing some gardening, a hobby she believes will serve her business by beautifying the grounds and creating an even more welcoming environment.
Omni Physical Therapy will have a gym both on the top and bottom floors plus four private rooms for treatment. Having built a wheelchair ramp to ADA specifications, the building will be ready on April 1, a new home for Omni’s valued clientele.
Are You Ready to Stop Leasing?
Is it time to start paying yourself rent? If so, you may be ready to purchase commercial real estate here in the St. Louis area, and we’re here to help. Get started on your search today!
Here’s a familiar story.
An entrepreneur is outgrowing her current space or is ready to lease new space for the first time. She goes for a drive, sees a sign on a building that looks like it might fit her company’s needs, and calls the number listed.
She asks the broker or the building owner, “How much is the rent?”
The person on the other end of the line may give her a quote based on square footage or a ballpark monthly estimate. But that number is rarely the full story.
Leases are complicated, and there are many items to consider and negotiate that have an impact on a business owner’s budget. For example:
- Who will pay the property insurance?
- Who will pay property taxes?
- What modifications will the renter need to make to the building, and how much will the landlord pay for any of her needed improvements?
My colleagues and I shine when we get to help business owners figure out how to make a lease agreement work for them. We get into the weeds of the contract, ask hard questions, and go to bat on our clients’ behalf.
We know what needs to be done and how to negotiate the particulars of a real estate deal. In this article, part of our series on how to find commercial property in St. Louis, we’ll talk about the different lease structures and how to negotiate a deal that makes the most sense to the renter and the property owner, setting both parties up for a long and fruitful relationship.
St. Louis Commercial Real Estate Lease Structures 101
Every lease has a base rental rate, which is the first number a broker or property manager might quote when asked. But each lease is structured based on how you and the owner will divide the expenses of occupying the building.
Every detail of the agreement will have to be defined in such a way that the tenant and landlord each know what they’re responsible for. We’ll begin negotiations by asking several questions, including:
- How long will the lease last?
- How much does the security deposit need to be?
- Who is paying for utilities?
- Who will pay the insurance?
- Who will pay the taxes?
- Who will pay for maintenance?
- Who will pay for capital improvements?
- Who will pay for buildout (and will there be a tenant allowance)?
- Is the rent based on the usable or rentable area?
- What parking is available, and how much will it cost?
While every agreement is potentially different and demands careful review, here are the primary ways leases are structured.
This is the Cadillac of leases where the property owner covers most everything. They usually take care of common spaces, bathrooms, elevators, taxes, insurance, janitorial cleaning, and utilities. They will usually even come and change lightbulbs when one burns out.
You typically pay one monthly amount—though you may negotiate additional services—and you can leave the details to the landlord.
Usually found in high rises and cared for by management companies, there are fewer hidden costs or fees in this sort of lease. Though you are in essence paying for everything, you won’t suddenly find yourself paying for higher insurance costs or taxes (unless it’s stipulated in your lease).
Gross or Modified Gross Lease
A gross lease refers to the tenant paying a set amount of rent per month with no additional rental expense for taxes, property insurance, or maintenance.
Often the tenant will pay for their utilities, janitorial services, or interior maintenance.
If it is a modified gross lease, the tenant may incur additional expenses not present in the typical gross lease. This may reflect additional expenses to the tenant.
Often, the rent on a property might cover the expenses for the first year of the lease, but then the tenant will be responsible for increases in subsequent years. Among other things, this could include increases in:
- Property taxes.
- Operating expenses.
Single-, Double- and Triple-Net (NNN) Leases
These very common lease types deal with how the landlord and tenant cover taxes, property insurance, and maintenance.
In a triple-net lease, the lessee will need to cover all three categories of expenses. In a double-net, two out of the three, and so forth.
Most landlords in the St. Louis area prefer to structure their commercial real estate leases this way. And though it seems simple on the surface, remember that every lease has the potential to be different, and the agreement needs to be reviewed by a professional, item by item.
When a lessee is ready to move out of their rented space but is still under contract, they may sublet to another tenant. This is an excellent opportunity for certain businesses who don’t want to sign a long-term lease.
A sublease might be right for you if:
- Your business is growing quickly, but you’re not sure how to project your growth. In other words, you don’t want to bite off more than you can chew. It will allow you extra time to shop for space while you figure out what you want to do next.
- You’re phasing down your business but not quite ready to close up shop. If you still have customers to care for, but you’re getting ready to retire or close for some other reason, you may consider this option instead of a traditional lease.
Lease with an Option to Expand
If you want to rent a space that’s currently the right size, but you expect to grow out of it soon, you might consider adding an “option to expand.”
If other spaces open up adjacent to yours—or elsewhere in the building or center—this part of your contract will act as a “first right of refusal.” Before the landlord opens up to other tenants, you get to decide if you want to take on that space in addition to your current lease agreement.
As of the publication of this article, the retail market has slowed. Things change quickly, but right now many St. Louis-area landlords are willing to add this detail (or consider other concessions) to your commercial real estate lease agreement in a space traditionally used for retail.
Don’t Forget to Consider Other Costs
What modifications will you have to make to the building? Are there contractors or architects you’ll need to hire? What zoning requirements and special permits will you need to take care of?
At Hilliker, we’re happy to help you make sure you’ve considered all these costs as you head out looking for commercial real estate for your business.
St. Louisans: Need Help Negotiating a Commercial Lease Agreement?
We at Hilliker are here to help. We’re professionals with many years of collective experience, poised to guide you through every stage in the process.
Give us a call and tell us how we can help you.
Frank L. Yocum, VP of Sales for Hilliker Corporation, began his career in commercial real estate brokerage in 1977. In 1993, Mr. Yocum joined Hilliker Corporation where he is a Vice President and is involved in all facets of commercial, industrial, institutional and investment real estate.
Through his experience honed, real estate expertise, his diligent efforts and creativity, satisfying his clients’ real estate needs, Mr. Yocum has established a large, loyal clientele. Many of Mr. Yocum’s clients have relied on him for decades.
You can learn more about Frank and his clients here.
Bringing High-Quality Shoes Directly to Customers
Jim Ferguson has spent his career in the shoe manufacturing business. Relying on years of experience, he knows what it takes to create high-quality handmade leather shoes.
He also knows what goes into the price of those shoes: wholesalers, distributors, and retailers. He and his partner, Bob Weber, had an idea to cut out the middlemen to bring high-quality leather shoes directly to the St. Louis area.
Together, they established Naked Boot and Shoe, a St. Louis-based handmade shoe line and retail store.
They did so by first establishing a relationship with Pakistan-based Tannery KTM Leather, a company that could use the all-natural process Ferguson believes would create the highest quality leather in an environmentally friendly manner.
Weber told the Webster-Kirkwood Times, “Because of our partnership with KTM Leather, we own and control our entire supply chain. Without the middle-man, we are able to pass our cost savings directly back to the customer.”
Additionally, they brought in senior merchandiser and fashion designer Kelly Weber (also Bob Weber’s niece) to help create custom designs for Naked Boot and Shoe. Only twenty-two, her work is already garnering attention from renowned designer Nicole Miller.
The partners opened their first location in Webster Groves at 8157 Big Bend and found it resonated with customers immediately.
Building on that momentum, they decided it was time to open a second location, this time in Chesterfield, MO. To find the right retail space for rental, Mr. Ferguson called on commercial real estate brokers Rebecca Thessen and Jeff Altvater at Hilliker Corporation.
Looking for the Perfect Fit in Chesterfield
The opportunity in Chesterfield was clear. With lots of shopping in the area and a clientele used to a high-end experience, there were no handmade shoe boutiques in the area. Naked Boot and Shoe could fill that need but first had to find a small retail space for rental in Chesterfield, MO with complimentary businesses nearby.
At the same time, Thessen and Altvater’s clients at 1590 Clarkson Road had an opening. Owned by Southern Real Estate and Financial Co., the building’s anchor tenants are Talbot’s and Chico’s, with a nearby nail salon and yoga studio. The open space, once occupied by a gourmet cupcake shop, had been vacant over a year.
Ferguson loved the space and decided to pursue it.
Cutting Out the Middleman
In such circumstances, she says, “I know the expectations of both the tenant and the landlord,” and that not going through a third party made the process “more time-efficient. I know them. I know what they like, and I know what they don’t like.”
Thessen said of Ferguson, “Jim is a great guy to work with, very efficient, very on top of things. He’s familiar with the business.”
Additionally, Thessen and Alvater were excited to have a retail solution already lined up for their client, an opportunity afforded them by being part of the Hilliker team.
The Right “Next Step”
Southern Real Estate’s John Roberts says, “It’s exciting to have [Naked Boot and Shoe] in the Chesterfield area,” believing placing them near Chico’s and Talbot’s will benefit all three stores, adding to the success of the retail center.
Positioned for expansion, Ferguson and Weber are bringing their vision for high-quality handmade shoes to West County. Naked Boot and Shoe’s second location at 1590 Clarkson Road is set to open March 15, 2019.
Looking for Retail Space for Rent?
Hilliker has solutions for you. Whether it’s in their database or listed with another company, we work tirelessly to find something that meets your needs. Get in touch with Hilliker today!