Commercial Real Estate
The
Renting in Today’s Market
First make sure that the area you have chosen is right
for your intended business. If you plan on expanding,
take that into consideration. Do you need to be close to
an expressway, or the local airport? Before you decide,
think ahead, because you may be getting into a long term
commitment.
Make sure that any space you’re considering is big enough
for both your current needs, and your foreseeable growth.
Be realistic and never over-commit.
Do your homework beforehand. Investigate traffic patterns;
tour the area and building. Find out who the previous
tenant was, and why the business left. Learn what kinds of
marketing the location does in support of its tenants (if any)
and whether co-operative marketing funds are available to
you.
Weigh the benefits of guaranteed foot traffic at a mall
location against premium rent. Some malls require that all
tenants stay open during mall hours, and pay for common
area usage as well as the store’s own space and upkeep.
Stores may also be asked to pay a percentage of sales to
the mall.
Identify your closest competitors. Also check out
neighboring businesses with an eye for complementary
products or services. If you are locating in a mall, check
the lease agreement for any guaranteed protection against
competition.
Evaluate whether the physical location and space is a good
fit with your product line. Do you need a large, bright space
or is an office warehouse sufficient?
Investigate any restrictions on signage. Signs are vitally
important to retail businesses, yet many landlords decide
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on what a store can and cannot do.
rules may be even stricter in a mall, which
closely monitors its physical appearance.
Negotiate the terms of your lease
aggressively. Think about consulting
a realtor that is familiar with the area.
Never accept wording that’s confusing or
that leaves you wondering who is liable
for what. Ask for the right of first refusal
on adjacent space in case you need to
expand. Negotiate for free improvements,
free rent, and other incentives before
signing your lease.
Hire a real estate attorney who not only
specializes in lease negotiations, but
knows your area and, preferably, has dealt
with your kind of business before. A lease
negotiation can cover tens, if not hundreds,
of terms, and you want someone in your
corner who has seen it all before.
Know who is responsible for maintaining
the heating, air-conditioning and other
systems, as well as keeping up the parking
lot and building exterior. This can be critical
in older buildings. Who pays for the utilities
and trash pick-up? The time has probably
never been better to start a new venture
if you have a business that is not being
adversely affected by this economy. Just
make sure you get the right location……