Hey all,

My best friend and I started our first business together about two years ago (a brick and mortar), and things have been going really well.

We had an idea for a hobby and community-based space that we wished we had access to, but didn’t seem to exist. We joked about the idea of quitting our jobs and starting it up, but that’s all it was for a couple of years–a joke.

Then one day my wife and I stumbled on a small commercial space that was empty due to COVID, and peeking through the window it looked perfect for our “joke” idea. I sent a photo of the space to my friend. We set up an appointment to talk to the landlord and basically pretended to know what we were doing, learned along the way, paid for everything through a successful Kickstarter campaign, and two years later we’ve both quit our day jobs and are making ends meet by running the business together.

So to get to the present situation, over the past two years our business has continued to grow. We aren’t raking in a ton of money, but we work very well together, our clients are super happy, and we’re making a profit and noticing that the little space is starting to reach its limits. It’s often busy inside seven days a week, and not all of our clients are able to get in when they’d like. For a little while there has been a running joke that we should just “knock down the walls” to the adjoining commercial space (which is occupied by an insurance office) and expand, but obviously that’s a ridiculous idea–nothing but a joke.

The capacity problem has prompted me to spend time hunting for a new, larger space for our business to move to once our lease is up. I’ve looked at over a dozen places in the area and none of them are a great fit–they’re all either way more expensive, in a worse location, or require tons renovation that we just don’t have the capacity to carry out.

Here’s the twist: The other day our landlord was saying hi and casually mentioned that the folks who have occupied the adjoining space for over a decade have moved away, and that he likes us and wants to talk about how we can take it over.

This is where I need your help: We have no idea what to expect from this conversation. All we know is that taking over the adjoining space is absolutely the dream scenario for business. We get to keep our great location, we don’t have to completely uproot, and we can stay with our landlord who has been really good to us rather than signing on with some big commercial property company.

Right now what we’re thinking is this:

We can see ourselves staying there for the life of our business, and signing a very long lease agreement, maybe even 10+ years. That being said, to make it ready for us to do business it’s going to require some serious renovation wherein we remove several walls in order to properly adjoin the spaces. We’d like to think that because the landlord is responsible for getting the space ready for a new leasee, and because these are structural changes to the building, these will be up to him to carry out and pay for before we officially move in but I have no idea if that’s reasonable. We’re also hoping that rather than doubling our rent to take over this new space, we’ll be able to negotiate only about an 80% increase, since we’ll be signing a long lease and saving him from dealing with a revolving door of new renters over the future.

Obviously we should hire a lawyer to help us with something like this, but I’m just curious what you all think is normal here? Are our expectations reasonable?

TL;DR - We basically stumbled into business ownership and got very lucky moving into our current space, but the downside is that we aren’t experienced with lease negotiation and don’t know if asking the landlord to pay for structural alterations and a lower rate is reasonable when taking over an adjoined business space.

Any advice would be much appreciated.