Control the Deal
Jeff Sutton, founder of Wharton Properties, is like many real estate entrepreneurs I meet or read about — each understands how to “control” a deal.
To control a deal, own a key element of a deal: a lease, a relationship, an option…
Below is an excerpt from The Real Deal interview with Jeff on how he got his start in the retail game with Payless Shoes:
“[Payless] wanted to be on every top street in the best locations possible. They wanted to be in front of the train, in front of the bus. I said ‘where do you want to be, Richard?’ He says ‘right there.’ He’s pointing to a building with two tenants in it already.
I said ‘ok, I’m going to get that location for you, I’m going to get rid of those tenants and buy both of those buildings for you. I’m going to put the [retail spaces] together and make one giant store for you. But I need one thing from you. I need you to give me a lease. Of course, the lease would be contingent on me doing all those things, getting the tenants out and putting you in there.
The lease is financing. Now, I can go to a bank and say I have a lease for the next 10 or 15 years with a triple A company.
He said ‘I hear you, but I’ve never heard of signing a lease before the guy owns the building.’ I said, it’s like any invention in life. What do you have to lose? Don’t buy any inventory, I’ll tell you how long it’s going to be before you can take the space and you can plan it. If we do one lease and it works, we can use the same lease again and again.”
He replicated the process with numerous retailers in NYC.
Originally published at raghavsapra.com.