STUDIO NOIR · Property Targets

Phase 1 lease requirements. What we look for. What we walk from.

Phase 2 flagship target preserved at the end for future reference.

Phase 1 envelope requirements (non-negotiable)

Site scorecard Phase 1 (40 points max)

Score below 24 = walk. 24 to 30 = negotiate hard. 30+ = pursue.

Total: 40 points max.

Phase 1 priority hunt zones (RDU)

Same ranking as the neighborhood analysis (01_NEIGHBORHOOD_ANALYSIS). Priority Phase 1:

Tier 1: North Hills (Raleigh) + Fenton (Cary)

• Landlords: Kane Realty (North Hills), Hines/Columbia (Fenton)
• Rent target: $45 to $65 per square foot per year NNN
• All-in rent target: $12,000 to $16,000 per month (2,000 sqft box; requires TI negotiation to work with $84K cash budget — see [[capital-stack]])

Tier 2: Waverly Place (Cary) + Village District (Raleigh)

• Cheaper high-street: $32 to $40 per sqft/year NNN (Waverly); $40 to $55 (Village District)
• All-in rent target: $7,000 to $10,000 per month (Waverly); $9,000 to $12,000 (Village District)

Tier 3: Brightleaf District (Downtown Durham)

• $30 to $45 per sqft/year NNN
• Landlord: Asana Partners
• All-in rent target: $6,000 to $9,000 per month

Phase 1 property sourcing (60-day sprint)

Total time from broker retention to lease signing: roughly 60 to 90 days.

1. Week 1-2: Interview and retain broker (see 02_BROKER_ROSTER). Broker is landlord-paid (no direct cost to us).
2. Week 2-3: Broker delivers 8 to 12 property survey. Includes second-generation retail and sublease opportunities.
3. Week 3-4: Trill (and Taj if available) tour top 5 in a 1-2 day sprint.
4. Week 4-5: LOI drafted on top 1, backup LOI on secondary. Structural walk-through by a licensed engineer BEFORE LOI signing.
5. Week 5-8: Lease negotiated with pole rigging language and landlord approval in writing.
6. Week 8-10: Lease signed. Buildout begins immediately.

Pre-LOI due diligence checklist (Phase 1)

Before we sign any Letter of Intent, we confirm:

• Structural engineer’s letter approving pole rigging installation on the ceiling. Non-negotiable. If landlord will not allow the engineer in for a walk-through, we walk from the deal.
• HVAC capacity check by a licensed HVAC contractor. Can existing system handle a hot pole class of 12 people? If marginal, budget for supplemental spot cooling ($2K to $5K).
• Landlord’s written intent to allow pole installation. In the LOI. In the lease. Photos and specs attached as exhibit.
• Zoning verification. Fitness / personal service / assembly use permitted as-of-right or via simple use permit (not conditional approval requiring hearings, which take months).
• Prior use check. No chemical, dry cleaner, or contaminated site history. If pre-1990 industrial, request Phase I ESA (Environmental Site Assessment).
• Roof age. If landlord’s roof is over 20 years old with no warranty transfer, negotiate a landlord roof warranty as a lease condition or walk.
• Sanitary sewer capacity. Confirm restroom flow can support (small studio, not a big issue but check).
• Parking count. Meet local UDO (Unified Development Ordinance) minimum for our use classification — Raleigh, Cary, or Durham depending on final site. Typically 1 stall per 300 sqft for personal service.
• ADA path of travel to public sidewalk and inside the space.

Phase 1 lease negotiation targets

• Base rent: at or below $4,000/month all-in.
• Lease term: 3 to 5 years with 5-year option. Phase 1 needs flexibility; a 10-year lease is too long a commitment for a proof-of-concept phase.
• Landlord tenant improvement (TI) allowance: any TI is bonus. Second-generation retail often comes as-is. If landlord offers TI, target $15 to $30 per sqft.
• Free rent during buildout: 60 to 90 days rent-free during the 6-10 week fit-out. Standard ask.
• Annual escalation cap: 3 percent maximum.
• Pole rigging clause: photos + specs attached, landlord approval in writing.
• Assignment and sublease rights: landlord consent not unreasonably withheld. Protects us if we need to move to Phase 2 flagship early.
• Personal guarantee: limited if possible. Landlord may require Taj personal guarantee for a first-time LLC. Negotiate cap at 6 months rent ($24K max exposure).
• Signage rights: exterior signage on facade allowed.

Phase 1 lease vs buy decision

Lease for Phase 1. No question.

• Buying commercial real estate at $85K opening capital is impossible.
• Even a small commercial condo at North Hills, Fenton, or the Village District runs $600K+ purchase price with 20-25% down = $120K+ just for down payment before we do anything else.
• Phase 1 is deliberately proof-of-concept scale. We do not want to be a real estate owner at this stage.
• Phase 2 opens the buy vs lease question again once we have real cash flow and a case for it.

What we walk away from Phase 1

• Any property with less than 10 foot clear ceilings
• Any landlord who will not approve pole rigging in writing
• Any property with columns in the middle of what would be the pole floor
• Any property where the structural engineer flags concerns
• Any neighborhood without adjacent premium retail cluster
• Any deal that would push rent above $4,500/month
• Any deal that requires more than 3 months security deposit
• Any deal requiring a personal guarantee exposure above 6 months rent

The right property is worth 60 days of extra searching. The wrong property drains our $85K and we do not get a second try.

Phase 2 property targets (2029-2030 flagship, preserved for reference)

Rewritten in 2028 against real Phase 1 numbers and real RDU market conditions.

Phase 2 target envelope: - Total square footage: 8,000 to 15,000 - Clear ceiling target: 16 to 20 feet in main studio (broadcast pole) - Column-free main floor: 40 ft x 60 ft minimum - 3-phase electrical service - Hospital-grade HVAC with MERV 14 filtration - Parking: 60+ stalls - Broadcast-ready loading/rigging egress - Zoning: TOD-CC or comparable

Phase 2 target neighborhoods (same list as Phase 1, expanded footprint options): - North Hills (Raleigh, Kane Realty — larger anchor pads at The Strand) - Fenton (Cary, Hines/Columbia — Phase 2 build-outs available) - Village District (Raleigh, York Properties — adaptive-reuse footprints) - Brightleaf District (Durham, Asana Partners — larger mill stock with tall ceilings for broadcast pole)

Phase 2 landlord TI negotiation targets: $50 to $75 per sqft on a 10-year lease term.

Phase 2 rent target: $30 to $45 per sqft NNN (net-net-net = tenant pays base rent plus common area + taxes + insurance separately).

Phase 2 buy vs lease decision reopens at that point.

Related docs

• Neighborhoods: 04_REAL_ESTATE_BUILDOUT/01
• Broker roster: 04_REAL_ESTATE_BUILDOUT/02
• Build spec: 04_REAL_ESTATE_BUILDOUT/03
• Architect + GC (Phase 2): 04_REAL_ESTATE_BUILDOUT/04
• MEP + structural + acoustic (Phase 2): 04_REAL_ESTATE_BUILDOUT/05
• Buildout budget: 04_REAL_ESTATE_BUILDOUT/06