If you are looking for retail space for lease, that means you have already determined your budget, and decided how much space you need. Next up is finding a few viable options. Before you locate, and subsequently lease, the retail space of your dreams you need to do your research.
Insider CRE tip, that happens to be the exact thought flashing in big bright letters in your head as you sign on the dotted line of your leasing contract. Your proverbial commercial real estate life flashes before your eyes…and you better be sure that you know the in’s and out’s of that retail space and the contract you’re about to sign. What we’re delicately saying is: Do your due diligence!
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Retail Space For Lease: The Phases of Due Diligence
In order to be most effective in any type of research, you must compartmentalize to get the job done. From process start to finish, there are going to be certain aspects of finding a retail space for lease that you hold under a microscope.
We’ve grouped these hyper-focused aspects into four major areas of due diligence: Location, Space, Contract and Broker. In each we break out what we feel are the most important items to know. Today we cover the first two: The Location and The Space.
Retail Space For Lease: Location
Right now you are saying to yourself, “Of course I have paid attention to the location of the retail space I want to lease.” But, when crossing the t’s and I’s of due diligence, there is more to consider than just the physical location of a retail space for lease.
How far off major highways and roadways is the asset? Can someone easily hop of the interstate and be at your front door? Paying close attention to how your customers will get to you is huge when shopping for retail space for lease.
When searching for the ideal retail space for lease you should think of proximity in regards to how close you are to i) traffic generators and ii) competitors.
Traffic Generators: It’s important to ensure that your retail space is easily accessible, but it’s equally as important to ensure you find a location that profits off of existing foot traffic. Pay attention to any and all nearby commercial assets that can generate traffic to your storefront. Is there a sports/entertainment arena nearby? College or University? Hip new restaurant or gathering spot?
Competitors: Being close to your direct competitors is a double-edged sword in the world of retail space. While on one hand retail shoppers prefer a multi-option shopping experience, you don’t want to be two doors down from someone else who also specializes in western wear. Be sure to take inventory of your potential fellow tenants.
Some tenants require a tremendous amount of parking and some only 2 or 3 designated spaces. It’s always good to know the parking ratio for your retail space for lease and make sure there isn’t a parking conflict with the other tenants. Be sure to ask about overflow options.
Retail Space For Lease: The Space
We won’t go into the typical things prospective tenants should pay attention to when touring retail space for lease as most are straightforward (physical quality, construction. Equipment condition, etc.). What we will point out are a couple items most people fail to ask about, consequently becoming huge issues in the future.
Obviously if you are looking at retail space for lease you are looking at space that is used for retail. Not rocket science. Say though, what if in year 3 of your 10-year lease you decide that retail is no longer your game and you want to open a nail salon? Negotiating the usage restrictions in the lease is something we recommend all of our clients consider. This makes you more flexible, protecting you from anything that your business, or life, tries to throw at you.
We already talked about getting a handle on potential fellow tenants at a prospective property, but what about the space itself? We can’t stress this enough, mainly because of the answers we have gotten when we asked it ourselves, but you should always ask these two questions: 1) Who was the previous tenant? 2) Why did they leave? Two very simple questions that provide a lot of information.
Prefer to have someone else do the work?
Opening or moving a business is quite stressful and the search for, and leasing of, commercial real estate is a huge part of that. If you want someone who has your best interests in mind, and the time to find your perfect space at the perfect deal, then contact one of our Charlotte retail leasing experts today.
Percival Partners is one of Charlotte’s most recognized and respected commercial real estate firms with more than 50 years experience in the region. Our professional and experienced real estate Advisors are in the business of listening, understanding, and adding value. No matter the commercial property type you own or seek, you can count on the Percival Partners team to maximize your return and peace of mind. To reach us, you can call us at 704.632.1000 or follow us on Twitter at @SVNPercival, LinkedIn or Facebook.