ADVANTAGES
1) Some Sellers are very motivated to sell
– Due to the economic challenges that many sellers
face they are motivated to sell quickly. Many
sellers are on the brink of going out of business
and they would be willing to get cents on the dollar
rather than get nothing and end up owing creditors
thousands of dollars.
2) Seller financing is available – Prior to
the downturn in the economy it was rare that sellers
were willing to carry back some of the financing on
a transaction. Today it is fairly common for sellers
to provide some financing.
3) Landlords are more flexible – In many
cases, especially where their tenants have gone out
of business, landlords are receptive to giving
better terms and conditions to new tenants to keep
their space leased. We are seeing many situations
where landlords are lowering rents for both new
tenants and existing tenants to help keep the tenant
in business.
4) Strong cash flow businesses are in high demand
– More so than ever these type of businesses are
in high demand as the risk factor for the buyer is
greatly diminished. Many sellers that have strong
cash flow businesses don’t want to sell today unless
they have to as they realize that it will be hard to
replace their cash flow in today’s environment.
DISADVANTAGES
1) Deals take longer to close- This is a
result of the staff cutbacks that are happening as a
result of the fiscal crisis the state is
experiencing. Many state departments such as the
Department of Alcohol Beverage Control (ABC), the
Franchise Tax Board (FTB), and State Board of
Equalization (SBE) have imposed four day work weeks.
Consequently it takes longer to transfer licenses
and get tax clearances from the various taxing
agencies.
2) Vulnerability for state audits – The State
Board of Equalization (SBE) and Franchise Tax Board
(FTB) are more aggressively auditing businesses in
escrow in an effort to raise more tax revenue which
delays the close of escrow.
3) Buyers are slow to come forward in many cases
– Buyers are more cautious today and move slower
in making deals.
4) More difficult to raise money- For many
buyers it is more difficult to raise money as equity
lines on homes are non existent and cash is tight.
Investors have more stringent criteria for getting
involved in deals.
Restaurant Realty has had extensive experience in
dealing with the situations indicated above and as a
result of our extensive deal making history we know
how to capitalize on both the positives and
negatives to help close deals in the best interests
of both buyers and sellers.
Lee Quan of Lee's Deli
Lee’s
Deli was created by Lee and Claudia in 1983,
however, its commitment to serving its customers
originated over 45 years ago. At the age of 14, Lee
worked in his dad’s butcher shop on Fillmore Street,
called Daily Meat Market, to provide quality meat at
a low price. It was here that Lee learned the
importance of serving fresh food in a timely manner
and having a commitment to his customers. This
experienced proved to be the foundation for what was
to come 24 years later –Lee’s Deli!
Lee’s Deli started out as a small deli on Kearny
Street featuring down-to-earth sandwiches at a low
price. The business began to grow as more people
around the financial district were drawn by the
fresh homemade turkey and roast beef. Lee’s started
opening new locations around San Francisco and
expanded its menu by offering breakfast egg
sandwiches, a salad bar, wraps, wonton noodle soup,
and even a Chinese food buffet bar. The newest
improvements to the Lee’s menu are the new deluxe
sandwiches featuring sauces such as chipotle, pesto
and curry and the hearty soup bar that offers a
healthy selection of wholesome soups such as chicken
sausage gumbo, sirloin beef and pasta, Boston clam
chowder and much more.
Beyond office catering, Lee’s now caters private
events such as graduation parties, baby parties and
picnics. Lee’s Deli now operates out of eleven
locations around the financial district, and the
foundation of fresh ingredients, value and service
still make up the center of the operation.
Restaurant Realty recently completed a transaction
with Lee and we wish him continued success in all of
his future endeavors (especially on the tennis court
as we occasionally play one another).
