Renting out commercial spaces for retail stores can be a very exhaustive process. It needs a lot of time and some strategic research. All commercial spaces look the same to newcomers in the market and they tend to close a deal by comparing prices. But, is it the right way? Scouting commercial property goes beyond comparing prices. You need to develop a more holistic approach to it. Here’s a brief look at a checklist for renting retail commercial space provided by the real estate professionals from Forum Properties:
Check the Condition of the Premise
Scanning both the interior and the exterior of the commercial space is necessary. Seek answers to important questions like:
- What is the foot traffic in the area?
- What is the demographic makeup of the people?
- Are there other notable retailers in that area?
Consumers are more likely to be in a store that appeals to them or at the least it should be visible to them. A grand building with a large entrance is as good as billboard advertising. It is visible and leaves an impression on the passerby.
Though the most primary of all, key points in this area are often overlooked. The rental cost should ideally be 3%-8% of the revenue. You need to check whether the rent is base rent or a portion of the store’s actual sales. What is included in the rental cost? Who is liable for miscellaneous expenses? Are there any additional utility costs included? What is the deposit? Probing about any hidden cost will save the hassle and confusion later on. Any doubts regarding the rent and additional costs must be clarified before the commencement of the lease agreement.
Retail space utilization needs unique bailouts, accessibility for all, and reliance on other neighboring businesses to generate profits. Space utilization must be thoroughly defined in the lease. If there are any common areas in the retail space, is it to be paid for? Common Area Maintenance (CAM) is usually charged in most commercial properties. Other interior aspects like lighting and security camera are added benefits to the retail space. If they are absent, can they be modified?
If your business is expecting customers from all over the city, there has to be ample space for reserved spaces for parking facilities. If the commercial property already provides a parking facility, does it have security and lights? You need to be sure of the expected parking space available for your employees and customers.
Having your insurance in place and getting it cross-checked with the commercial property owner lies in the best interest of both parties. Being adept in legal terminologies like arbitration clauses (settling a dispute with arbitration instead of litigation), personal guarantees, termination rights, and remedies are important before signing the lease agreement.
The need of every business varies, but the above aspects remain true to all irrespective of the type or scale of business.