— By Kevin Montgomery (@kevinmonty) |
We've already posted about this story twice this week, so we're going to keep this short. But after being contacted by an “East Bay cafe owner looking to expand into San Francisco,” commercial realtor Tracy Chiao spilled the beans that 780 Valencia Street (formerly occupied by The Summit) is most definitely for rent, and at a price far beyond what any local business could ever possibly afford:
Subject: 780 Valencia
Attached is the flyer for the building. We are looking at $30k / month NNN in rent plus $2,300 / month in estimated NNN expenses. Please let me know if you have any questions!
Best,
Tracy C Chiao
Retail Leasing Specialist
And here's the building flyer:
Since our last post on the La Boulange story, a spokesman for the La Boulange told us the only reason they didn't move into 780 Valencia was because “the space was too big.” We have since learned that SoCal burger chain Umami Burger is eying the location for their continued NorCal expansion.
We're still waiting to i/o Ventures to return to our phone calls, but it appears what they've been saying to the press thus far has been completely dishonest.
Comments (11)
So Chicken John was right after all.
32,000/month just to open the door? Damn that’s expensive…
I Owe Ventures
Sorry, couldn’t resist.
Soon the only difference between The Mission and The Marina will be that one is cleaner.
Unfortunately, it is chock full of douchebags and betties, which pretty much cancels out any credit implied by waterfront location.
Curious how much Ritual and the former Summit gross each month.
Let’s look at the numbers. They bought the building for $1,414,500 in the summer of 2008. Property records show renovations totalling about $300,000, give or take. Let’s assume a total expense of $1,700,000 (real estate + renovations.)
Based on that figure, if we assume a 30 year mortgage with 5% interest, the monthly payment would be about $9,100 – less than ⅓ of the price for rent of the cafe alone! Seems like a crappy deal.
On the other hand, one full-time employee at $10/hour is going to cost you $20,800.
Since you’ll need several employees, labor is still going to be far more expensive than rent.Edit: disregard that last part, I was confusing years with months. The yearly rent on this cafe is about $360,000, which is far more than the labor would ever cost for an operation of this size.
That price seems wildly out of line with comps in the city generally and on Valencia specifically. Isn’t the old Z-Barn down the street (btw 16th and 17th) more than twice as big and renting for one-third the price?
I suppose it can’t hurt to try.
Please, no more burger places.
Yes, I was right. But really, why is it ‘bad’ that they try? To me, it’s only when they subvert the process that ‘wrong’ happens. If La Boulenge wants to try to get the permit, go for it. We’ll oppose you and that’s why we have hearings. IO Ventures doesn’t actually have to tell us every details of their personal business. They can be vauge or misleading if they want to. No crime there. There is a process that we have, and as long as we all work inside that process, things are cool. It’s when people go outside that process that it becomes a shitshow.
As for % on mortgages, Mr. Eric Gregory I hate to be the one to have to explain to you what a “Jumbo Loan” is. It’s anything over $500,000. And the interest on their loan is probably closer to 8 or 9%. Straight up. It changes things quite a bit…
I’m going to introduce you to a really, really great tool. Trust me. Spend 10 minutes with this thing. It will help you get a grip on mortgage interest like you’ve never had before:
http://www.drcalculator.com/mortgage/
Red is interest, blue is principle. Slide the sliders around… watch the nubers fly off the charts…
SF is one of like 15 places in the USA (including Manhattan, Kennybunkport or Dana Point) that you can’t rent the thing out for the mortgage. And it’s been like this since the boom of
98.
As for my fiance’, Eileen Hassi and her 4 Ritual coffee bars and 1 roastery… that has nothing to do with my railing against privatization, corperate stores impeding on the Valencia Corridor or anything else that this topic is on about. This would all be exactly the same if the Summit was a shoe store or a High Colonic Thearpy Salon.
She has no plans to open any more coffee bars at this time, nor will Ritual ever have enough stores to be classified by Prop G to be formula retail.
Good reporting here, Kevin.
kisses, chicken
All this talk about money makes me want a coffee.