Before the Lease: Why We Now Take Preliminary Plans to the City First

We had a retail food tenant under contract for a space that looked, on paper, like a great fit. Good location, good landlord, good rent. The landlord told us there wouldn't be any issues getting food-use approval. We took that at face value and moved forward.

Around the same time, we were looking at a separate property for the same type of tenant. That landlord was upfront about something we hadn't considered: the city was actively trying to limit the number of food tenants in that immediate area. Not because food doesn't do well — because a shopping district with too many food tenants and not enough of a mix starts to lose the pull that brings people in from farther away. Cities and landlords alike care about tenant mix, and food concentration is one of the things municipalities will quietly cap through permitting.

That second conversation made us go back and question the first property, where the landlord had told us everything would be fine. It turned out there was, in fact, a real issue — the kind that only surfaces once you're deep into the entitlement process, well after a lease is signed and a tenant has started spending money on the buildout.

The lesson: a landlord telling you there's no issue is not the same as the city telling you there's no issue. Landlords aren't always trying to mislead anyone — sometimes they genuinely don't know, or they're working off outdated information. But their word isn't a substitute for verification. From now on, before we finalize a lease for a food or any use-sensitive tenant, we check directly with the city — Department of Building and Safety, Planning, and whatever other department is relevant to that use. We submit basic preliminary plans and sit down for an initial consultation before the lease is done, not after.

You don't need final architectural drawings to do this. Basic plans are enough to get real feedback: whether the location is already over quota for that use, whether there are other entitlement issues specific to that stretch of the city, whether the timeline is going to be six weeks or six months. You find out by asking, not by assuming.

We're applying this now on another deal in progress. Same category of tenant, different city. We're submitting preliminary plans and getting in front of the city before the lease is finalized, even though it means the deal takes longer to close. It would be easier to just get the lease signed, feel that sense of relief, and loop in the architect and contractor afterward — but by the time problems show up at that stage, you're months behind and the tenant is the one absorbing the cost and the frustration.

As a broker, you can't fully outsource this to your tenant's team. Ideally you're mobilizing your client's architect or contractor to engage with the city early too — but even if that takes time to coordinate, someone needs to be proactively checking before the lease is done, not reactively dealing with it after.

The extra weeks upfront are worth it. A tenant who struggles for months after signing a lease is a bad outcome for everyone, no matter how fast the lease itself closed. The goal isn't just getting to a signed lease — it's getting your client open and making money as soon as possible after that.

Have a similar experience to share, or want help vetting a location before you commit? Contact us.