ROOK

TENANT REPRESENTATION · REAL ESTATE DEAL ANALYSIS & FINANCIAL MODELING

Nueve Filos Barber Co. — Shop No. 2
Allapattah, Miami · Tenant Representation Package

Nine chairs, 1,950 SF, second-generation salon. What the shop can pay, what it must not, and why the box decides it.

SUBMARKETAllapattah, Miami

RECOMMENDED RENT$36.00/SF NNN

RENT FACTOR7.88% of revenue

RETURN ON CAPITAL20.27% CoC

§1 · Engagement Highlights

Seven findings that decided the recommendation

The box is the deal; the rent is the detail. Second-generation salon space is worth $325,037 of capital and 9–17 weeks of permitting. The entire ten-year rent negotiation is worth $156,000.
The published rent benchmark is unusable. Barbershop guidance says 13% of revenue. That panel blends booth-rent shops. At 13% this tenant returns 10.98%. The governing band here is 7.5%–9.5%.
Four points of chair utilization ≈ the whole rent negotiation. $44 → $30 of base rent moves the return 4.21 points. 70% → 66% utilization moves it 3.99 points.
The trophy site produces the most revenue and the worst return. $1,326,553 of revenue, $282,058 of EBITDAR — and 15.56% on $935,530 of capital. Its incremental capital earns 3.22%.
The cheapest rent is the worst deal. Site C: an 8.84% rent factor, a post-tension slab, $1,068,082 of capital and a 2.81% return. Its maximum supportable rent is negative.
The ramp is a recruitment problem. A nine-chair shop opens with five barbers. LY1 runs at 77.13% of stabilized. Six months of abatement is worth 5.42 points of Year-1 return.
Chair rent cannot lease this space. Matching the commission model would require $818.90 per chair per week — 2.2× the top of the published Miami band.

Stabilized gross revenue

$1,175,233

9 chairs × 358 days × 70% × 9.5 services × $52.00, plus retail

Rent factor at target

7.88%

against an 8.03% maximum supportable

Cash-on-cash return

20.27%

on $647,493 of net operator capital

§2 · The Requirement

A shop translated into criteria a broker can be held to

Nueve Filos Grooming, LLC (fabricated) runs one 1,050 SF, five-chair shop in Little Havana, open since 2019: $678,011 of trailing-twelve gross revenue, $49,560 of occupancy cost, a 7.31% rent factor and $135,602 of revenue per chair. It is physically full at 79% chair utilization with a fourteen-day forward book. The operator cannot grow revenue in the existing box; it can only add chairs somewhere else.

Program — stated as a chair plan

Zone	Area	Basis
Cutting floor — 9 stations	900 SF	100 SF per station incl. circulation
Wash bay — 3 shampoo stations	165 SF	55 SF per station
Retail front and lounge	340 SF	10 lounge seats, 12 LF of display
Reception / point of sale	90 SF	Desk, queue, ADA approach
ADA restroom	65 SF	One WC, one lavatory
Back of house	235 SF	Laundry, dispensary, lockers, IT
Circulation and walls	155 SF	≈8% of gross
Target premises	1,950 SF	Range 1,600–2,200 SF

Why nine chairs

Revenue. Nine chairs at 70% utilization produce 21,426 services and $1,175,233. Eight produce $1,044,651 against an identical $228,116 fixed base.

Recruitment. Nine chairs need nine Florida-licensed barbers. Three transfer from the existing bench; six are recruited. Ten would need seven recruits and push the ramp out a quarter.

Breakeven. The shop breaks even at 6.39 chairs. Nine gives a 2.61-chair cushion — 29% of the plan. Eight would give 1.61.

Program deal-breaker. Any space that cannot seat nine chairs without eliminating the retail front. Retail is 5.20% of revenue at 50% margin and is the only line the house keeps in full.

§3 · Market State

A market with no slack, and a submarket with a 3.6× rent spread

Miami-Dade retail, Q2 2026

Metric	Colliers	Matthews
Retail vacancy	3.0%	3.3% (Miami)
Average asking rent	$42.50/SF (+2.6% q/q)	$36.50/SF regional
Net absorption	+378,795 SF	+404,000 SF (Miami)
Under construction	1.3M+ SF	1.4M SF (Miami)
Delivered in quarter	—	48,700 SF (Miami)
Retail cap rate	—	5.8% (Miami)

Colliers reports released 2026-07-16 via Commercial Observer; Matthews South Florida Retail Q2 2026 (2026-07-20). Both retrieved 2026-08-06.

Three percent vacancy is not a market, it is a queue. New supply is arriving at roughly one-eighth the rate demand is consuming it. The general market gives this tenant nothing.

Allapattah asking-rent bands

Band	Asking range	Fit
Industrial-adjacent / secondary	$21–$30/SF NNN	Only where infrastructure exists
Neighborhood commercial	$32–$46/SF NNN	The tenant's band
New mixed-use podium	$48–$62/SF NNN	Above supportable; worst physical condition
Design-adjacent spillover	$65–$75+/SF NNN	Not this tenant

Fifteen marketed retail spaces in Allapattah spanning $21.00–$75.00/SF/yr — CommercialCafe live listings, retrieved 2026-08-06.

A 3.6× spread inside one neighborhood means the submarket average is meaningless. The tenant's job is not to negotiate a discount to an average — it is to identify which band a box belongs in and refuse to pay a band above it.

§4 · Trade Area

Who is here, and the capture rate the plan actually needs

ZCTA	Population	Male	Male 15–64	Households	Median HH income	Median age
33125	56,897	29,890	21,006	21,616	$44,979	42.8
33127	26,786	13,529	9,047	9,292	$41,230	37.4
33136	16,545	7,854	6,430	7,252	$44,843	36.4
33142	58,908	29,137	18,787	20,613	$39,608	39.5
Trade area	159,136	80,410	55,270	58,773	$42,486	—
City of Miami	459,745	233,567	169,257	194,821	—	—

U.S. Census ACS 2020–2024 five-year estimates (B01001, B01003, B11001, B19013, B03003) via the Census Reporter API, retrieved 2026-08-06. Trade-area median household income is household-weighted.

The capture rate

21,426 services ÷ 13 visits per customer per year = 1,648 regular customers = 2.98% of the 55,270 resident males aged 15–64 — counting no daytime worker, no woman, no child and no visitor. Women and children are 14% of the existing store's ticket count.

Three percent is deliberately the smallest defensible version of the assumption. A concept that needs 3% of the men in its own trade area is not reaching. A concept that needs 12% is.

Why Allapattah, and the daytime asymmetry

Allapattah's south-eastern edge abuts the Miami Health District — the country's second-largest concentration of medical and research facilities after Houston, served by the Civic Center and Santa Clara Metrorail stations. Its resident population is 3,155 people in 1,388 households, and that is the point: the district's population is a daytime population.

Shift workers book at 06:30, 14:30 and 20:00. A shop whose weekday utilization is set by 17:00–19:30 walk-ins runs five idle chair-hours a day. And a $52 ticket is defensible against a hospital payroll in a way it is not against a $42,486 household median alone.

§5 · Site Criteria

The infrastructure and licensing thresholds, and how each was derived

Plumbing — the cost driver

Requirement	Threshold
Sanitary waste	2" per wash station, vented to an existing stack within 25 ft
Floor drains	Minimum two in the wash bay, trapped and primed
Hair / lint interception	Interceptor on the wash-station waste branch
Slab	Conventional slab-on-grade. Post-tension is a deal-breaker
Domestic water	1.5" service; ¾" branch to the wash bay
Restroom	One ADA-compliant restroom within the premises

Water heater sizing

Three stations at 2.0 GPM, 60% simultaneous, mixed to 105°F from 140°F storage against a 76°F Miami inlet: ≈3.6 GPM mixed, 2.1 GPM at storage temperature, across a 20-minute peak = 42 gallons of draw. Minimum specification: 100-gallon commercial storage or a 120 GPH first-hour rating. The 50-gallon residential unit in most second-generation retail fails on the third station.

Electrical load

Load	Demand
Nine stations (clippers, dryer receptacle, light)	13,500 W
Blow dryers, three simultaneous	5,625 W
Water heater, 100-gal / 27 kW recovery	27,000 W
HVAC — 7-ton rooftop	≈9,800 W
Lighting, retail, POS, laundry, general	≈11,000 W
Connected load, diversified	≈62 kW
Minimum service	400A, 208V three-phase

Florida DBPR salon licensing

Fla. Admin. Code R. 61G3-19.011 (Barbershop Requirements) sets minimum 100 SF excluding restroom; toilet and sink with running water within 300 feet; EPA-registered disinfection; separation from living quarters. Ch. 61G3-19 governs registration, display, sanitation posting, renewal and inspections.

Licensing is not on the critical path. The shop may open on issuance of the shop license; the initial DBPR inspection is unannounced and occurs within roughly 90 days after. The license is non-transferable on any change of location, ownership or business name — which is why the LOI removes any landlord relocation right.

§6 · Permit Float

The single largest schedule risk in this tenant type

The City of Miami states approximately 14 business days for a building permit application and offers no expedited review. Practitioner data puts initial review at 5–10 days, each resubmittal at another 5–10 days, and most commercial projects at 2–3 correction cycles, with overall duration of 4–12 weeks.

Those figures are not why the four candidates differ. Scope is. A plans examiner reviewing an interior alteration with no slab work, no service upgrade and no change of use has one discipline to comment on. The same examiner reviewing a shell fit-out with new sanitary below slab, a new electrical service, a new rooftop unit and a new restroom is reviewing four — and each comment restarts a 5–10 day clock.

Site	Scope character	Permit	Rating
A	Underground plumbing, new service, new HVAC, shell fit-out	22–28 wks	HIGH
B	Interior alteration inside the existing use classification	13 wks	LOW
C	Shell + post-tension slab + structural review	26–34 wks	SEVERE
D	Plumbing reconfiguration, grease close-out, change of use	17–21 wks	MODERATE

Recommended-site schedule, with float carried

Milestone	Date	Week
LOI issued	2026-08-24	0
LOI accepted	2026-09-07	2
Lease executed	2026-10-16	8
Delivery of premises	2026-10-30	10
A/E + MEP construction documents	2026-12-04	15
Permit application submitted	2026-12-07	15
City of Miami 1st review complete (14 business days)	2026-12-28	19
Correction cycle 1 response + re-review	2027-01-25	23
Correction cycle 2 response + re-review	2027-02-22	27
Building permit issued (13 weeks from submittal)	2027-03-08	29
Construction complete (12 weeks)	2027-05-31	42
Final inspections, CO / CC	2027-06-21	45
Certificate of Use + Business Tax Receipt	2027-06-28	46
DBPR barbershop license issued (on application)	2027-06-28	46
Soft open	2027-07-06	47
Grand open / Rent Commencement	2027-07-19	48

The schedule carries two correction cycles and no expedited review. A third costs four weeks. A raw-shell scope pushes permit issuance to week 38–46 and opening past the peak into 2028 planning. The lease absorbs this, not the tenant — a fixturization period running to 180 days after permit issuance, then six months of abatement.

§7 · The Four Candidates

All sites, addresses, buildings and landlords are fabricated

	A — Ventana 22	B — The Sabal Exchange	C — Calle Doce Plaza	D — Rio Bravo Mercantile
Address (fabricated)	2380 NW 22nd St	1755 NW 20th St	1245 NW 12th Ave	3120 NW 7th Ave
Prior use	Raw shell, new podium	Second-generation SALON	Raw shell, post-tension slab	Second-gen restaurant
Rentable area	2,150 SF	1,950 SF	1,780 SF	2,240 SF
Chairs supported	10	9	8	9
Asking / negotiated base	$52.00 / $47.00	$44.00 / $36.00	$38.00 / $34.00	$41.00 / $36.00
NNN load	$16.50	$11.50	$9.75	$10.25
TI allowance	$60.00/SF	$45.00/SF	$20.00/SF	$30.00/SF
Free rent	4 months	6 months	3 months	5 months
Term available	10 yr + 2×5	10 yr + 2×5	5 yr, no options	10 yr + 1×5
Wash-station waste / drains	None — one capped stub	4 stations, 2 floor drains	None; post-tension slab	Kitchen waste, wrong location
Electrical service	200A single-phase	400A three-phase	150A	400A three-phase
HVAC	Shell — no unit	7-ton RTU, 2021	4-ton split, 2009	10-ton RTU
ADA restroom in premises	None	Present, compliant	Shared center restroom	Non-conforming layout
Distance from existing store	3.1 mi	2.6 mi	2.2 mi	4.4 mi
Modelled overlap with book	14%	12%	19%	8%

§8 · Build-Out Risk

The decisive column — what the building already has

Direct hard cost by scope	A	B	C	D
Base fit-out scope (identical)	$260,900	$260,900	$260,900	$260,900
Wash stations tied to existing rough-in	—	$34,000	—	—
Wash-station drains re-run from kitchen waste	—	—	—	$41,000
Sanitary drains + floor drains, slab saw-cut	$58,000	—	$58,000	—
Domestic water rough-in	$26,000	—	$26,000	—
Commercial water heater + service	$22,000	$9,800	$22,000	$9,800
ADA restroom construction	$48,000	—	$48,000	$21,000
Electrical service upgrade 200A → 400A	$64,000	—	$64,000	—
HVAC	$78,000	$18,500	$78,000	$14,500
Hair/lint interceptor	$9,500	—	$9,500	—
Sprinkler extension into shell	$16,000	—	$16,000	—
Grease-waste demo and sewer close-out	—	—	—	$12,500
Post-tension slab platform + structural review	—	—	$38,000	—
Total direct hard cost	$582,400	$323,200	$620,400	$359,700
Hard cost per SF	$308.81	$188.95	$397.33	$183.06
Total project cost	$1,064,530	$735,243	$1,103,682	$781,014
Net capital at risk	$935,530	$647,493	$1,068,082	$713,814

The second-generation credit, derived.
Raw-shell scope a salon box already has $321,500
Less scope Site B still requires ($62,300)
Direct hard-cost differential $259,200
Plus general conditions and GC fee, 14% $36,288
Plus 10% contingency on the differential $29,549
= SECOND-GENERATION CREDIT $325,037

Measured a second way — the difference in total project cost between the trophy site and the recommended site — the figure is $329,287. Two methods, a 1.3% spread.

The entire ten-year rent negotiation at the recommended site is worth $8.00/SF × 1,950 SF × 10 years = $156,000 undiscounted. The second-generation credit is 3.7× the TI allowance and more than twice the rent negotiation, and the tenant collects it on day one instead of over a decade.

For a barbershop, the box is the deal and the rent is the detail. Which is why build-out and permit risk carries 20 of the 100 points in the scoring model and occupancy cost carries 18.

§9 · Weighted Scoring Model

Weights fixed before the sites were seen; they sum to 100

Criterion	Weight	A	B	C	D
Build-out & permit risk	20	3	9	2	6
Occupancy cost vs supportable rent	18	3	9	6	4
Infrastructure adequacy (plumbing, power, HVAC, ADA)	14	3	9	2	6
Trade area & daytime population	13	8	8	7	4
Lease term, control & exclusivity	9	8	8	2	7
Access, parking & transit	8	6	8	5	9
Cannibalisation / brand-halo distance	7	7	8	6	4
Visibility & storefront presence	6	9	7	5	6
Co-tenancy & adjacency	5	8	7	6	4
Weighted score	100	52.3	84.1	42.7	54.7

The score ranks; the gates decide. Two gates are applied before the score is read: Gate 1 — any of the ten deal-breakers eliminates a site. Gate 2 — a site whose negotiated occupancy exceeds the maximum supportable derived from its own P&L is eliminated. Site D scores 54.7, above Site A's 52.3, on parking and a pylon — and is still the second-worst deal, because a weighted average cannot express that its trade area produces 29% less revenue.

§10 · Chair Economics

Building EBITDAR before a dollar of rent is charged

Revenue build

Annual services = chairs × operating days × chair utilization × services per productive chair-day
= 9 × 358 × 0.70 × 9.5 = 21,426

Service	Price	Share	Revenue
Signature cut and style	$48	34%	$349,677
Skin fade	$52	19%	$211,692
Cut + beard sculpt	$70	21%	$314,967
Beard trim / line-up	$30	10%	$64,279
Hot-towel straight-razor shave	$58	7%	$86,991
Kids under 12	$34	6%	$43,710
Gray blending / color camouflage	$67	3%	$43,067
Blended ticket / service revenue	$52.01	100%	$1,114,168
Retail — 9.5% attach × $30.00		5.20%	$61,065
GROSS REVENUE			$1,175,233

Cross-checks: revenue per chair $130,581 (existing store $135,602); revenue per barber-day $494; retail 5.20% of gross against a published 3%–6% band.

Profit and loss to EBITDAR

Line	Amount	% of gross
GROSS REVENUE	$1,175,233	100.00%
Barber commission — 50% of service, 1099	$557,084	47.40%
Barber commission on retail	$6,106	0.52%
Retail cost of goods	$30,532	2.60%
GROSS PROFIT (house)	$581,510	49.48%
Front-of-house payroll incl. burden	$120,065	10.22%
Back-bar and barber supplies	$44,995	3.83%
Laundry and linen	$10,200	0.87%
Booking platform and POS	$11,880	1.01%
Merchant / card fees	$29,275	2.49%
Marketing and promotion	$47,009	4.00%
Utilities	$10,530	0.90%
Repairs and maintenance	$8,400	0.71%
Insurance	$14,600	1.24%
General and administrative	$22,800	1.94%
Music licensing	$1,900	0.16%
Multi-unit overhead allocation	$36,000	3.06%
Total house operating expense	$357,654	30.43%
EBITDAR — before rent	$223,855	19.05%

Fixed / variable decomposition. Fixed cost $228,116; variable $723,261; variable ratio 0.615420; contribution margin 0.384580. EBITDAR(Rev) = Rev × 0.384580 − $228,116 → $1,175,233 × 0.384580 − $228,116 = $223,855 ✓. Break-even on EBITDAR alone: $593,155. Revenue needed to cover fixed plus the recommended occupancy: $834,002. The $8.00/SF under negotiation is worth $40,564 of required revenue — 780 services a year.

§11 · The Rent Ladder

Maximum supportable and walk-away, derived from the P&L

Test 1 — operating margin

Max occupancy = EBITDAR − (target margin × revenue)
= $223,855 − (0.075 × $1,175,233)
= $135,713  (11.55%)

Test 2 — return on invested capital

Total project cost  $735,243
Less TI allowance ($45.00 × 1,950)  ($87,750)
NET CAPITAL AT RISK  $647,493

Required EBITDA = 0.20 × $647,493 = $129,499
Max occupancy = $223,855 − $129,499 = $94,357  (8.03%)

MAXIMUM SUPPORTABLE = min($135,713, $94,357) = $94,357
= 8.03% of gross revenue = $48.39/SF all-in
= $10,484 per chair per year
Less NNN ($11.50 × 1,950) = ($22,425)
MAXIMUM SUPPORTABLE BASE RENT = $36.89/SF

The capital test binds, by $41,356. Every additional $1.00/SF of TI allowance raises the ceiling by $0.20/SF — five dollars of allowance buys one dollar of rent. Which is also why rent is the primary lever here, not allowance: a dollar of rent is worth five times a dollar of TI in return terms and ten times across the term.

The negotiating ladder

Position	Base rent	Occupancy	Rent factor	Shop EBITDA	Margin	Cash-on-cash	BE chairs
Opening offer	$31.00	$82,875	7.05%	$140,980	12.00%	21.77%	6.19
Target	$36.00	$92,625	7.88%	$131,230	11.17%	20.27%	6.39
Maximum supportable	$36.89	$94,357	8.03%	$129,499	11.02%	20.00%	6.42
Landlord asking	$44.00	$108,225	9.21%	$115,630	9.84%	17.86%	6.70
Walk-away	$53.49	$126,731	10.78%	$97,124	8.26%	15.00%	7.07

The walk-away sits above the landlord's ask, and that is worth being explicit about. At $44.00 the deal still returns 17.86% — below the 20% hurdle, above the 15% floor. This deal will be signed. The negotiation is worth $15,600 a year and 2.41 points of return; it is not worth the transaction. A walk-away manufactured below the ask to look tough would misrepresent the tenant's position to the tenant.

Why the published 13% benchmark fails

At a 13.00% rent factor:
Occupancy = 0.13 × $1,175,233 = $152,780
Shop EBITDA = $223,855 − $152,780 = $71,075
Margin 6.05% · Return on $647,493 = 10.98%

The published panel blends booth-rent shops, where the house pays no commission. Here 47.40% of gross revenue leaves before the house pays a bill.

§12 · The Ramp

A nine-chair shop opens with five barbers

Recruitment-driven ramp

Month	Chairs staffed	Utilization of staffed chairs	Effective utilization of 9
1	5	52%	28.9%
2	5	58%	32.2%
3	6	60%	40.0%
4	6	64%	42.7%
5	7	65%	50.6%
6	7	68%	52.9%
7	8	68%	60.4%
8	8	70%	62.2%
9	9	68%	68.0%
10	9	70%	70.0%
11	9	70%	70.0%
12	9	70%	70.0%
LY1 average			53.99%
LY1 revenue factor			77.13%

Three barbers transfer from the existing store's bench — a decision to move revenue, not create it. Six are recruited; each brings 35–55% of their prior book.

Year-1 survival test

Line	Base ramp	Slow ramp (7 chairs by M12)
LY1 revenue factor	77.13%	57.17%
LY1 gross revenue	$906,453	$671,872
Chair-equivalents delivered	6.94 of 9	5.15 of 9
LY1 EBITDAR	$120,488	$30,273
Cash occupancy, six months abated	($57,525)	($57,525)
LY1 shop-level EBITDA	$62,963	($27,252)
Return on $647,493	9.72%	(4.21%)
Same year with no abatement	$27,863 (4.30%)	($62,352)
LY1 break-even chairs	5.69	5.69
Survives Year 1?	YES	NO

The abatement is worth $35,100 in Lease Year 1 — 5.42 percentage points of first-year return — and it arrives in the only twelve months in which the operator has no cash.

Under slow recruitment the shop burns $27,252 in Year 1 even with six months abated. That burn is absorbed by the $85,000 working capital reserve carried inside the project cost — 3.1× cover. The risk that ends this deal is a staffing risk, not a real-estate risk. No lease term fixes it; the lease can only buy time.

§13 · Break-Even Chairs & Chair Rent

Two exhibits specific to this tenant type

Break-even chair count

Contribution per chair = ($1,175,233 / 9) × 0.384580 = $50,219
Break-even chairs = (fixed + occupancy) / contribution per chair

Scenario	Fixed + occupancy	Break-even chairs	Cushion
Stabilized at target $36.00	$320,741	6.39	2.61 chairs (29.0%)
Stabilized at ask $44.00	$336,341	6.70	2.30 chairs (25.6%)
LY1, six months abated	$285,641	5.69	delivered 6.94 — clears by 1.25
LY1, no abatement	$320,741	6.39	delivered 6.94 — clears by 0.55
LY1, slow ramp, six months abated	$285,641	5.69	delivered 5.15 — fails by 0.54
Site D for comparison	—	8.35 of 9	0.65 chairs
Site C for comparison	—	7.28 of 8	0.72 chairs (5-yr term)

The tenant can lose two barbers permanently and still cover every cost including rent. At the landlord's asking rent the cushion narrows to 2.30 chairs — the eight dollars per square foot under negotiation is worth 0.31 of a chair.

Chair rent (booth) versus commission

	$295/week	$370/week
Booth rent, 9 chairs × 52 weeks	$138,060	$173,160
House retail revenue	$28,000	$28,000
House gross revenue	$166,060	$201,160
House operating costs	$81,927	$81,927
EBITDAR before rent	$84,133	$119,233
Less recommended occupancy	($92,625)	($92,625)
Shop-level EBITDA	($8,492)	$26,608
Occupancy as % of booth income	67.1%	53.5%
Return on $594,193	(1.43%)	4.48%

Published Miami barber booth rent: $500–$1,200/month mid-range, $1,600+/month high end (Booksy, updated 2026-07-29).

Solve for the booth rent that replicates the commission model's $131,230 of shop EBITDA:
$383,245 per year = $818.90 per chair per week = $3,548 per chair per month
2.2× the top of the published band. No barber pays it. Tested at a lower 12% hurdle on a leaner $594,193 capital base, a booth-rent operator's maximum supportable occupancy is $12,829 — $6.58/SF all-in, below the $11.50 NNN load alone. A booth-rent operator cannot lease any of the four sites at any base rent, including zero.

§14 · Total Occupancy Cost

Ten years, all-in, at negotiated rents

	A — Ventana 22	B — Sabal Exchange	C — Calle Doce	D — Rio Bravo
Negotiated base rent	$47.00/SF	$36.00/SF	$34.00/SF	$36.00/SF
Year-1 total occupancy	$136,525	$92,625	$77,875	$103,600
Free rent / abatement value	4 mo · $33,683	6 mo · $35,100	3 mo · $15,130	5 mo · $33,600
TI allowance	$129,000	$87,750	$35,600	$67,200
Term modelled	10 yr	10 yr	5 yr	10 yr
Nominal cash occupancy over term	$1,540,913	$1,032,741	$399,244	$1,160,200
Net effective rent /SF	$46.31	$34.97	$30.40	$36.77
NPV of occupancy @ 9.0%, net of TI	$828,864	$550,639	$271,179	$651,719
Rent factor at stabilization	10.29%	7.88%	8.84%	10.98%
Maximum supportable occupancy	$94,952	$94,357	($105,735)	($13,085)
Headroom vs negotiated occupancy	($41,573)	$1,732	($183,610)	($116,685)
Net capital at risk	$935,530	$647,493	$1,068,082	$713,814
Cash-on-cash	15.56%	20.27%	2.81%	3.65%
Break-even chairs	7.16 of 10	6.39 of 9	7.28 of 8	8.35 of 9
Shop EBITDA over the term	$1,440,653	$1,347,852	$70,582	$249,367
Verdict	REJECT	RECOMMEND	REJECT	REJECT

Site B costs $508,172 less in nominal occupancy over ten years than Site A and requires $288,037 less capital, in exchange for $92,801 less shop-level EBITDA. The incremental capital Site A demands earns $92,801 ÷ $288,037 ÷ 10 = 3.22% a year. The operator can do better with a certificate of deposit and without a personal guaranty.

§15 · Ten-Year Cash Flow

Recommended terms — $36.00/SF, 3.0% escalation, 6 months abated, $45/SF TI

LY	Base $/SF	Base rent	Abatement	NNN	Cash occupancy	Gross revenue	Rent factor	Shop EBITDA	Margin
LY1	$36.00	$70,200	$-35,100	$22,425	$57,525	$906,453	6.35%	$62,963	6.95%
LY2	$37.08	$72,306	—	$23,210	$95,516	$1,128,223	8.47%	$110,261	9.77%
LY3	$38.19	$74,475	—	$24,022	$98,497	$1,175,233	8.38%	$125,358	10.67%
LY4	$39.34	$76,709	—	$24,863	$101,572	$1,198,737	8.47%	$131,322	10.96%
LY5	$40.52	$79,011	—	$25,733	$104,744	$1,222,712	8.57%	$137,371	11.23%
LY6	$41.73	$81,381	—	$26,634	$108,015	$1,247,166	8.66%	$143,505	11.51%
LY7	$42.99	$83,822	—	$27,566	$111,389	$1,272,110	8.76%	$149,724	11.77%
LY8	$44.28	$86,337	—	$28,531	$114,868	$1,297,552	8.85%	$156,029	12.02%
LY9	$45.60	$88,927	—	$29,529	$118,457	$1,323,503	8.95%	$162,420	12.27%
LY10	$46.97	$91,595	—	$30,563	$122,158	$1,349,973	9.05%	$168,899	12.51%
Total		$804,764	$-35,100	$263,076	$1,032,741			$1,347,852

Revenue: LY1 at 77.13% of stabilized (recruitment ramp), LY2 at 96%, LY3 at 100%, thereafter +2.0% annually.

Net effective rent

Total contract base rent  $804,764
Less abatement  ($35,100)
Less TI allowance  ($87,750)
Net base rent to landlord  $681,914
÷ (1,950 SF × 10 years = 19,500 SF-years)
NET EFFECTIVE RENT $34.97/SF

Average contract rent across the term is $41.27/SF — 14.6% above the Year-1 face. Net effective is 15.3% below that average and only $1.03 below the Year-1 face. The escalations claw back nearly everything the concession package gives away.

NPV of cash occupancy at 9.0%: $638,389. Net of TI received: $550,639.

The rent-factor drift is the term risk, and this tenant can afford it.
Cash occupancy grows from $98,497 in LY3 to $122,158 in LY10 — a 3.12% compound rate — against 2.0% revenue growth. The rent factor drifts from 8.38% to 9.05%, pushing the back half of the term above the 8.03% ceiling. The whole ten-year escalation exposure is worth 1.12 percentage points of annual revenue growth.

The BLS Miami other goods and services index — which contains personal care products and services — rose 9.1% over the twelve months to June 2026. A restaurant tenant concedes the same escalation against a category that rose 0.2%. The escalation is affordable, provided the operator actually takes the price.

No percentage rent is proposed or should be accepted. 47.4% of gross revenue is commission-encumbered; percentage rent would be charged on a top line the tenant never receives.

§16 · Sensitivity

What the deal survives, and what it does not

Shop-level EBITDA margin

Utilization ↓ / Base rent →	$30.00	$33.00	$36.00	$40.00	$44.00
58%	6.72%	6.12%	5.52%	4.72%	3.92%
62%	8.77%	8.21%	7.64%	6.90%	6.15%
66%	10.57%	10.04%	9.51%	8.81%	8.10%
70%	12.16%	11.66%	11.17%	10.50%	9.84%
74%	13.58%	13.11%	12.64%	12.01%	11.39%

Rent factor (governing band 7.5%–9.5%)

Utilization ↓ / Base rent →	$30.00	$33.00	$36.00	$40.00	$44.00
58%	8.31%	8.91%	9.51%	10.31%	11.11%
62%	7.77%	8.34%	8.90%	9.65%	10.40%
66%	7.30%	7.83%	8.36%	9.06%	9.77%
70%	6.89%	7.38%	7.88%	8.55%	9.21%
74%	6.51%	6.98%	7.46%	8.08%	8.71%

Cash-on-cash return on $647,493

Utilization ↓ / Base rent →	$30.00	$33.00	$36.00	$40.00	$44.00
58%	10.11%	9.20%	8.30%	7.10%	5.89%
62%	14.10%	13.19%	12.29%	11.09%	9.88%
66%	18.09%	17.18%	16.28%	15.07%	13.87%
70%	22.07%	21.17%	20.27%	19.06%	17.86%
74%	26.06%	25.16%	24.26%	23.05%	21.85%

The rows dominate the columns, decisively. Moving base rent across the entire negotiable range — $44.00 to $30.00 — changes the return by 4.21 points. Moving utilization from 70% to 66% changes it by 3.99 points. Four points of utilization is one barber working one fewer day a week.

Negotiate the rent hard, sign, and then spend the organizational energy on the chair. A tenant that fights six weeks for three dollars a square foot and then under-invests in recruiting and retention has optimized the smaller variable.

At $36.00 and 58% utilization — a 17% miss, equivalent to running seven and a half chairs permanently — the shop still produces a 5.52% margin, a 9.51% rent factor and an 8.30% return: inside the 10.78% walk-away with 127 basis points to spare. The same miss at the asking rent produces an 11.11% rent factor, outside the walk-away, and a 5.89% return.

§17 · Recommended Terms & Risk

The LOI position and what has to be diligenced

Recommendation

Site B

The Sabal Exchange, 1755 NW 20th Street (fabricated address), Allapattah. 1,950 SF, nine chairs, second-generation salon. Weighted score 84.1 — the only site clearing both gates.

Headline economics

20.27%

Cash-on-cash on $647,493 of net operator capital. Rent factor 7.88% against an 8.03% ceiling. Break-even at 6.39 of nine chairs.

The reason

$325,037

Second-generation credit — 3.7× the TI allowance, more than twice the entire ten-year rent negotiation, collected on day one.

LOI position

Term	Position
Term	10 years, two 5-year options at 95% of FMR with a floor and a 115% ceiling
Base rent	Open at $31.00 · target $36.00 · never above $36.89 · walk at $53.49
Escalation	3.0% on base; NNN at 3.5% with a 4% cap on controllable operating expenses and an 18-month audit right
Free rent	Fixturization from delivery to the earlier of opening or 180 days after permit issuance, then six months of base-rent abatement
TI allowance	$45.00/SF, tenant-controlled, two progress draws plus final, offset right at prime + 4%
Delivery condition	4 wash-station rough-ins, 2 floor drains, non-post-tension slab, 400A three-phase with 12 spare spaces, 7-ton RTU with a 12-month landlord warranty, in-premises ADA restroom
Exclusive	Barbershops, hair salons, blow-dry bars and any use over 15% hair services — building-wide and within 1,000 feet
Contingencies	30-day diligence · building permit (180 days) · Certificate of Use · Certificate of Completion · DBPR barbershop license
Deposit / guaranty	$17,550 (3 months), burning down · capped limited guaranty with good-guy release
Percentage rent	None, any year

Risk register

Risk	Mitigant
The $52.00 ticket is wrong	At $46 the maximum supportable base rent falls to $8.20/SF. 30-day diligence contingency; verify against the operator's own POS
Wash-station rough-ins unusable	Losing $96,000 of the credit moves the ceiling from $36.89 to $24.54/SF. Made a delivery condition, surveyed in diligence
Slab is post-tensioned	Ground-penetrating-radar scan is a diligence item; Landlord must deliver as-builts within 10 days of LOI acceptance
Barber recruitment stalls	Slow ramp burns $27,252 in LY1. Covered 3.1× by the $85,000 working capital reserve; six months of abatement
1099 reclassification	$83,841 a year of employer taxes — 91% of occupancy — taking the return to 7.32%. Must be documented by counsel before signing
NNN escalates above 3.5%	4% cap on controllable expenses; exclusion list; 18-month audit right with cost-shifting above 3%
Permit slips a third cycle	Rent commencement runs from permit issuance, not a calendar date
Prior salon went dark for a reason	Written disclosure of the circumstances required within 10 days of LOI acceptance
Landlord relocation right	Refused outright — the DBPR shop license is non-transferable on a change of location

Recommendation. Issue a non-binding Letter of Intent on Site B — The Sabal Exchange, 1755 NW 20th Street (fabricated address), Allapattah — opening at $31.00/SF, targeting $36.00/SF, never signing above $36.89/SF, and walking at $53.49/SF. At the target, total occupancy is $92,625 against $1,175,233 of stabilized gross revenue: a 7.88% rent factor, an 11.17% shop-level margin, a break-even at 6.39 of nine chairs, and a 20.27% return on $647,493 of the operator's capital.