When you're just starting a business or moving an existing one, it can be difficult to find retail space.To find retail space, you have to estimate how much you can afford and find properties in your price range.You need to understand the lease terms before you negotiate them.
Step 1: How much space do you need?
Walk through your competitor's stores to find out how much space they use.Depending on your business, you will need sales floor, stock room, dressing rooms, offices, and bathroom.To estimate your sales floor needs, use this simple calculation: sales volume divided by sales per square foot.Average retail sales per square foot can be found at the statista website.
Step 2: What can you afford?
Take a look at your financial performance if your business is already up and running.You have to estimate how much money is in your budget for retail space if you haven't opened your business yet.
Step 3: You can search online.
You would like to find at least four or five spaces to rent.You can search online by location, property type, lease rate, and space size.Co-star is a subscription service.You will have to pay to use them.You might want to consider a subscription service if you can't find what you're looking for.
Step 4: Look in the paper.
Commercial landlords still advertise.Find the classified ads.You can visit any landlord's website if they advertise in the newspaper.The landlord has other properties that you can check out.
Step 5: The rental rate should be checked.
Commercial space rent can be calculated by square foot or percentage of sales.Rents can range from $0 to several dollars a square foot, or you can pay a percentage of gross sales.It's a good idea to list the rental rate in online or classified ads.If you have questions, contact the management office.
Step 6: You can check the crime rates.
Customers won't visit if your business is located in a safe area.The area's crime statistics can be found at mylocalcrime.com.You can search by zip code.
Step 7: Find out where your competitors are located.
Some businesses want to be close to their competitors.If your competitors are successful, you are guaranteed foot traffic because customers already stop by the area.It's possible that you don't want to be too close to your competitors.The public might already be loyal to established businesses, and it will be hard to distinguish yourself.
Step 8: Look for businesses that are similar.
People will stop at many different stores during their shopping trip.A person going to lunch might stop at a clothing store along the way.You can benefit from being near other retail establishments.The demographic you target should be the same as your business.If you have a children's clothing store, you should be located near a daycare.It is not ideal to be near a bar.
Step 9: You should check the proximity of public transportation.
Consider if you want to be located near public transportation.It is easier to get foot traffic near your store if you are close to public transportation.You have to think about what kind of clientele you want to reach.You might open a high-end boutique.You probably don't want to be near public transportation since higher-income people are more likely to drive.
Step 10: Go to the retail space.
Don't rely on pictures only.You should stop by the retail space to get a feel for it.Ask the landlord to let you walk through the space.
Step 11: It's a good idea to confirm the space is for your business.
Businesses are not allowed to operate in certain geographic zones.If you decide to open a business in the area, you should stop by the local zoning office to make sure.
Step 12: Referred to.
You might not be able to find properties on your own, either online or in the newspaper.Don't worry.A broker can help you find something that's right for you.Talk to your real estate attorney if you want to get referrals to a tenant broker.They should be aware of local brokers.Ask someone who rents.Ask for the broker's name and tell them you are looking to rent.You can find a broker on the website.
Step 13: Ask about the broker's fee.
3% of the total lease costs is charged by commercial real estate brokers.A five-year lease at 20,000 a year would cost around $3,000.You may be able to negotiate a flat fee.The brokerage fee is paid by many landlords.If the landlord doesn't pay, then using a broker is the best way to find retail space.
Step 14: An exclusive representation agreement is a good idea.
They want you to only work with them.They will ask you to sign a representation agreement if you find a property on your own.Do you think this is the best option?If you have a lot of confidence in the broker's ability to find you a property, you might sign this agreement.A non-exclusive agreement will allow you to pay the broker a fee only if they find you a property.
Step 15: Ask the agent for a proposal.
Call the leasing agent if you want to rent commercial space.You can find the phone number on the internet.Ask about a proposal.Request for proposals for at least two different properties.You can play the two landlords against each other.If you have more than one option, you will be in a better negotiating position.
Step 16: A lawyer can review the lease.
A lawyer should check your lease before you negotiate it.You can get a referral from your local or state bar association if you don't already have a lawyer.You can schedule a consultation by calling them.Tell them that you have a lease and need help understanding it.You can save a lot of time and money by getting a lawyer involved at the beginning of the process.If you're not comfortable negotiating, a lawyer can help.
Step 17: Determine how long the lease is.
A retail lease lasts for a minimum of three years, and some commercial leases last for up to five years.You may want a shorter lease with the right to renew.You can get out of the lease if your business isn't doing well, but you still have the option of renewing if the space works for you.It is possible that landlords will resist shortening it for you.
Step 18: Do you know how rent is calculated?
Find out how the rent is calculated by reading the proposal.You could be charged based on square footage or percentage of sales.Rent increases are handled in a different way.Every year landlords try to increase the rent.Understand how the increase is calculated.Rent might go up along with the consumer price index.
Step 19: Someone has to pay for expenses.
The total cost includes more than the rent.The tenant is usually responsible for other expenses.Who will pay for electrical plumbing, heat air conditioning, trash removal, and property taxes?
Step 20: Obtain rights to sign.
You need to check the lease to make sure you can put up signs.Make sure you are comfortable with the signs.There are restrictions on where you can put signs and how large they can be.The higher your rights, the more important you are as a tenant.The most important tenants can get building top signs, which can be seen around the block.There is a sign above the main entrance that shows less important tenants.
Step 21: Check if the space can be renovated.
The retail space may need to be renovated.The build-out provisions are included in landlords' leases.What improvements can be made and who will pay for them.Alterations to the space might be paid for by the landlord in a longer lease.
Step 22: The space can be subleased.
A lot of landlords don't want you to sub lease the space to someone else.If you can't pay your rent anymore, a sublease clause can protect you.If the landlord wants to sub lease the property, seek out a right to do so.This is a fair tradeoff.
Step 23: The exit plan clause needs to be reviewed.
You can pay a penalty if you cancel the lease early.If you can, try to negotiate as small a penalty as possible.
Step 24: Check for an exclusive use clause.
The clause prevents your landlord from renting space to one of your competitors.Try to get a broad exclusive use clause as a tenant.You might run a yoga studio.You may want to exclude other yoga studios, but also other fitness businesses.
Step 25: You can draft and submit a counteroffer.
You should draft your own counteroffer after assessing the landlord proposal.You should be aggressive in your initial counteroffer.You are not likely to get everything you want.Unless you ask for them, you won't get any concessions.Ask for a lower rental rate, shorter lease term and broad exclusive use clause.You are also negotiating with another landlord in your counteroffer.The landlord might give you more concessions as a result of this news.
Step 26: A personal guarantee can be signed.
Most landlords want you to personally guarantee the lease.The landlord can come after you personally if you can't pay the lease.If you have no credit history, you can sign a personal guarantee.
Step 27: You have to make a payment.
A security deposit and/or prepayments are expected by many commercial landlords.Up to two months of rent can be used as a security deposit and up to three months as pre-paid rent.