Having been in the climbing industry for 10 years, we’ve got a fair idea of how complicated leasing for climbing gyms can be. We want to help both our clients and the industry as a whole to understand the process, to make sure they’re getting the most out of their lease. Read on to find out the 4 major things you should consider when negotiating the lease for your site.
Understand your long-term budget – and what you can afford
This may seem like a no brainer, but for people new to the industry it might not be as apparent as you think! Make sure you negotiate a leasing price that is reasonable, within budget, and not pushing the limits of what you can afford. Usually premium areas or shopping centres will have a higher lease rate, so keep this in mind when looking at your different options. If you have a clear idea of your long-term budget and how far this can be pushed, you won’t be caught out down the line.
Consider your negotiations – include a rent-free period
Most leases will allow a certain period where you will not need to pay rent at the beginning of your lease. This is to give you time to fit out your facility, get it operational and have money coming in. It will also allow time for your climbing wall to be built. Rent-free periods can usually range from 1 month to 12 months. It is quite typical to have a 3-6 month rent-free period in your lease. Keep in mind, the harder you negotiate on your rent-free period, the less extras you’ll probably get added in such as that dream bathroom or changes to your lighting.
Look into your council zoning and understand your expenses
Council in all areas will have fees associated with each business operating within the area. These fees can vary from the type of business you operate, to the hours you operate, and there is usually a lot of work to completely understand these. Just because you can lease a warehouse, doesn’t mean that Council will allow you to operate your business in that area. Do your homework and due diligence, but most of all understand the expenses that Council will hit you with. Also, plan for delays with your permits and approvals from Council because trust us, there will be delays!
Consider the term of your lease and renewal options
Typically, a climbing centre will look for a 7-10 year lease option. Sometimes in the right business situation you could go down to a 5 year lease. Most businesses will negotiate the option to renew their lease once their term is up (for example a 7 year lease, plus another 7 years). Something to note is that there can often be clauses to terminate the lease, and you should read through these in great detail. The most common is a demolition clause – where the landlord can terminate your contract with only a few months’ notice. In this situation you may need to vacate the premises, including all your goods.
While it may seem like a lot to think about, it’s important to consider all the above points when you are negotiating the lease for the site of your climbing gym. These are the top four things we believe you should keep in mind – but there’s plenty more that you need to take into account, so make sure you do your research. Haven’t quite found the perfect site? Check out our tips for identifying the ideal site for your climbing gym.