Considerations For Leasing Retail Space: Part 2
Welcome to part 2 of our series on leasing retail space! In part 1 we talked about how to find the best retail space, which included: doing in-depth research on the area, assessing parking and proximity to transit, knowing what other businesses and attractions are in the area, and checking out the local competition. If you haven’t read through part 1 yet you can check it out here.
Now that you’ve found what seems like the perfect retail space, it’s time to really buckle down and make sure you have a solid understanding of the financial and legal side of things.
- Check your rent: to avoid any surprises down the road, make sure you understand how much rent you will be paying and what exactly is included in that cost. Additionally, check to see if there are any operating costs that have not been quoted as part of the additional rent to include in your business’ operating budget.
- Lease terms: do you have a clear understanding of all the terms in the lease agreement? If not, it is wise to have a commercial real estate lawyer review and advise you on the terms. You’ll want to pay special attention to exclusive clauses and space measurement, because one of the biggest mistakes you can make is to sign your lease agreement without knowing exactly what you are committing to.
- Selecting Contractors: retail properties require additional consideration while performing construction, especially because it will most likely take place during the other tenants operating hours. Finding the right contractor who has experience with retail property and can supply good references will make all the difference in the world. You’ll also want to ensure that they provide insurance and that they are in good standing with WCB. Do your research and conduct reference checks, because hiring the wrong contractor can cause both the landlord and other tenant’s major headaches and can end up costing you more money and time.
- The benefits of Architects: the biggest benefit to hiring an architect or a Space Planner is that they’ll draw up your plans and ensure that they are acceptable to the municipal authorities that you’re dealing with. Look for an architect that has a solid history with the municipality; their established relationships with the governing authority will help with getting permit approvals through faster.
- Final touches: ensure that you feel confident about the tenant improvement work and related costs. Have you given enough time in your lease for permit approval, consultants, design, and site improvements before you have to start paying full rent? Also, have you received landlord approval?
Leasing retail space doesn’t have to be a complicated endeavour. When it all comes down to it, find the space that best fits your budget, is the ideal size for what your business requires, and is in the best possible location to suit your target market. Most importantly, understand your lease agreement before you sign it.
What we can do to help: We manage a broad range of retail properties and work on behalf of property owners to find the best tenants for their properties. We keep the owners best interests at heart, ensuring that their properties are taken care of and that their long term visions are achieved.
Interested in learning more about commercial management? Give our office a call at 604-662-4034.