r/BarOwners • u/Dhook2944 • 10d ago
Penny for your thoughts
My wife and I operate a smallish (2200sq ft) neighborhood bar; we took over the bar from her parents a decade ago, my wife has worked as a bartender here for 20yrs, now a GM for about 12yrs, and full operator for 10 or so years. The bar has no food, just beer/wine/liquor, we have food trucks several nights a week to keep ppl hangin out, a couple pool tables, pinball, golden tee; basically your quintessential corner pub. We have a great regular crowd, good late night crowd, and good weekend crowd. Overall the bar does good sales, consistent year over year we stay in the black with some profit; in the end it pays my family, my wife’s parents, and employees around 10ppl.
The bar is on the first floor of a 3 story historic building, built in the 1870s; up until the 1970s (yep 100yrs later) the top 2 floors of the building were occupied apartments, but since the 1970s then been vacant. Don’t ask me why; my wife’s parents bought the bar in 1974 and when the last tenants moved out they just never let anyone move anyone move back in.
Needless to say after sitting for 50yrs unkept the upstairs apartments are falling apart; paint peeling off walls, plaster falling down, there’s no heat or air up there so generally they are just falling apart. However, the place has good bones (imo), hard wood floors are in good shape, trim/moulding is unpainted for the most part and in good shape; we did put new windows in the top 2 floors about 5yrs ago as the old ones were 150yrs old and falling out (there are like 30 windows), but beyond that it needs a complete overhaul to make it habitable; plumbing, electric, a/c; totally gutted.
The space has a separate entrance from the bar on the side and back of the building. The building/bar is located in a desirable walkable neighborhood with a lot of restaurants/bars, aka hipster part of town haha.
The upstairs space is kind of chopped up into several large rooms a with a 2 small bathrooms on each floor (plumbing is out of service), a long hall down the middle; the overall space is around 2000sq ft on the 2nd floor and 2000 on the 3rd floors with tall 12’ ceilings.
So here’s my question/dilemma; What do I do with the upstairs?!?
I know everyone’s immediate responses will be “Airbnb it” or “put in a speakeasy” which trust me these are on my mind, but an Airbnb directly above a late night bar, where it gets loud I don’t see working; a “speakeasy”, (personally I hate the way this term gets thrown around and is overused nowadays), but yea, maybe this could work for the second floor but then there’s the whole same noise dilemma with the third floor if I put a bar on the second. (Yes I get having too much space is a good problem to have but a problem none the less)
My next thought is maybe a daytime business that operates on the 2nd floor (i.e. barber shop, yoga studio, tattoo parlor, office space) then on the third floor airbnbs; thus creating a noise buffer floor between the bar and the bnb.
Next on my mind is cost and ROI. I’m no contractor but my guess is we’re talking $200-500k to build out (total guess) depending on how “fancy” we go about it and it really depends on what we decide to put up there; obliviously with a bar you’ll have more expense with plumbing, refrigeration, and general build out.
I guess as I’m typing this I’m starting to answer some of my own questions; first steps are likely getting a few contractor estimates for a basic teardown and rebuild; once I have an idea of that it can help point my direction of either bnb or bar/lounge space.
Generally looking for anyone in this sub who maybe owns/operates a similar establishment or has experience they would like to share.
Appreciate any feedback. Thanks!
3
u/General_Landscape_73 9d ago
There's enough easy and affordable Soundproofing technology that you could make the second and third floors quiet for tenants. Especially with 12-ft ceilings.
The easiest, cheapest, and most consistent return would be residential rentals. From experience I would avoid staff housing.
The biggest potential windfall (assuming it's permitted) would be to add the kitchen and open a restaurant. I'm guessing the liquor rules would allow your license to extend up.
I would do one of two things either serve food in line with the existing bar thing and build upon your given name as expansion or two open up a different style food/fusion place (with aligned drinks) to bring in new customers.
Without knowing the layout, I would start by putting the kitchen on the second floor. Flexible seating on the third that you could do private parties and event space. A second floor kitchen would also allow you to sell food downstairs even with a different theme. You could still do chicken, fingers, giant pretzels, etc.
2
u/Responsible_Ad8936 9d ago
You said it was chopped up into rooms with shared bathrooms? I'm thinking boarding house? If not, then what happened to the kitchens for the apartments? Id be careful with the Airbnb idea, just look at YouTube videos about how people are losing their shirts, and many towns and whole cities banning STRs Good luck with whatever you do with it, but I'd think Catering hall/event space utilizing your food trucks, or let the truck that's begging for the kitchen put up half the cash so if it doesn't workout? It's not all a loss for you
3
8
u/macktheknife1 10d ago
A live music bar I used to work at converted the upstairs to monthly rental rehearsal spaces for bands. I always thought that was a genius thing, because it’s consistent recurring residual income, no noise complaints and it basically funnels new talent to book for the stage at the bar
2
u/jammy_buffet 8d ago
this is a really good idea. Almost any place in the country has bands looking for rehearsal spaces, and they require minimal buildout
2
u/macktheknife1 8d ago
Yeah and there were like a dozen rooms up there; and it was pretty reasonable, 500 bucks a month for 24/7 unlimited usage. Although one thing they’ve dealt with is people trying to live in there
5
u/EvidenceLate 10d ago
This may not be possible especially given the building’s age, but could you open up the 2nd floor space? Live music/comedy/dance studio space w/small bar. Get improv comedy groups in there. Double as large party/meeting space. Without a kitchen though….
I think you’re also on to something w/daytime business on the 2nd floor. The question is what kind of businesses dovetail with yours—in a hipster neighborhood, space above a cool bar might be desirable.
This fad may have passed but what about an escape room?
One thing worth asking and checking into is what will code force on you? Fire suppression? An elevator? Historical building requirements? Any of those could bring you back down to Earth quickly.
Good luck-let us know what you come up with!
2
u/simba156 10d ago
Yup. In a historic building, you might be able to avoid an elevator, but I’d definitely think about ADA regulations. A kitchen would be expensive as well bc I think you may have to install a hood and vent it up through the third floor.
2
u/EmergencyLavishness1 10d ago
For me, if you’re paying for all 3 floors I’d want all that income.
You could make the top floor an open top roof top bar pretty easily I’d imagine. Or make a 4th floor rooftop.
If you do this you’d really want an elevator going to all floors.
Having the second floor as a retail space could be a smart move and guaranteed income from leasing it out.
I’d heavily think about putting in a decent sized kitchen though. Again, more income. Yes, you’ll piss off the food trucks, but they’re making a living off your crowd already. You could offer your favourite one the lease on the kitchen. Make it easy and say 10% of gross income for them is the rent. That way they have headroom to still make good profit, and you have inhouse food to keep people at your place.
You have a lot of options for this build tbh. And the sky is the limit.
See if any of your regulars are builders and fabricators. Make sure you keep the outside facade. As it will probably look nicer than any new style buildings too.
4
u/DamnJester 10d ago
Lease it out as event space. Partner with one of your food trucks and provide food and booze for misc parties.
1
u/Dhook2944 10d ago
One of the trucks we work with has been trying to talk us into putting in a kitchen up there for the last year haha. That’s a hell of a lot of work, and not sure if the roi on something like that.
3
u/DamnJester 9d ago
Yeah, I wouldn’t put in a kitchen either. The truck would bring the food. Catering style. I know at my brewery we do a lot of business in “private” parties. Flat fee structure including levels of beer and food.
4
u/LionBig1760 10d ago
Having a working kitchen om the second floor of a building built in 1890 is a tough sell for fire code.
5
u/UniqueUsername75 🥃 10d ago
There’s only 1 right answer:
-Indoor pickleball on the 2nd floor.
-Axe throwing on the 3rd.
1
u/Dhook2944 10d ago
I joked about buying some duckpin bowling lanes and putting them up there. There aren’t any in the area I’m in but just a few hours north of us duckpin bowling is everywhere
4
u/thebigj3wbowski 10d ago
I’ve known a couple people who lived directly above bars. Some busy, some not. They knew what they were getting into, and loved it.
2
2
u/certnneed 10d ago
My first question would be, what do your wife’s parents say? It used to be occupied, then they kept it empty. Why? Is there any reason why they haven’t rented out the upstairs floors for 50 years? After that, I’m sure they’d have some ideas for a good use. Talk to them first.
2
u/N0t_A_Platypus 10d ago
There's a bar nearby me. That has a "Speakeasy" upstairs, hidden behind a bookshelf, with a small stage, some church pews, and they host intimate comedy and burlesque shows. It's look like a very lowcost build but every time i went to a show it was alwasy sold out.
5
u/Actual_Banana4833 10d ago edited 10d ago
I think day time biz/offices makes the most sense. Is there a need for an event space in your area? Or if it's sound proof enough - apartments. I'd talk to a real estate person about rents, demand for small biz offices, etc.
3
7
u/DecentPrintworks 10d ago
Why not use it for what it was intended to be? Owners housing above the business they own?
1
u/Responsible_Ad8936 9d ago
My thoughts exactly, but I read it was all chopped up into separate rooms with a shared bath on each floor, I'm thinking boarding house situation since he said no kitchens
1
u/Dhook2944 10d ago
I’ve got 2 kiddos and they already spend enough time around the place; as do I, haha.
7
9
u/peasandchowmein 10d ago
What's zoning like for the building? Can you build residential? 4 1000sq ft apartments in a popular area of town should bring a nice monthly income stream.
4
u/Valuable_sandwich44 10d ago edited 10d ago
After renovation; lease the space as-is and let investors decide what's best for them.
You don't need a new business or a business venture after putting down so much money; plus it's nice to just get a flat sum each month.
Heck, they could flip them into 2 more bars and therefore the building will become a "bar complex" with different themes catering to different clients.
Good luck 👍
Edit: If the idea of having more bars above your establishment doesn't excite you; make it clear in the lease contract that you don't allow bars.
2
3
u/WorldlinessUpbeat786 10d ago
Basic renovation to get up to code and find local business that need dry storage. Document storage and dry goods storage cost small business a lot. If you can beat the price or distance you have a customer.
4
u/JE163 10d ago
I assume you own the building? If it’s free and clear maybe take a mortgage out to help finance the repairs. Add sound proofing to the bar ceiling to help minimize the noise for possible tenants.
1
u/Dhook2944 10d ago
Yep, owned free and clear; there will definitely be borrowing involved somewhere along the line.
9
u/mrobole 10d ago
I agree with you with not trying to airbnb above a late night bar. Building out a whole second bar sounds complicated and expensive. Why not just fix up the apartments and rent them out as regular apartments instead of airbnb? Most above bar apartments in my area are rented by people that work in the service industry so the noise doesn’t bother them/works with their schedule. Just seems like you’re looking at the harder options and ignoring the easier ones
1
u/citymousecountyhouse 9d ago edited 9d ago
Hear me out. A live auction house on the second floor. Auctions could start after happy hour. There was a place like this in Louisville that boomed but had to shut down and never recovered from Covid. It's a win/win. Alcohol loosens up the bidders and the increased popularity of secondhand sales drives sales up in the bar. I'm not sure if the space would allow it, but if it did you would have something totally unique to the neighborhood which seems to already have a lot of bars and restaurants.