The process of finding a storefront and actually moving into it is taking me much longer than I had hoped. The entire process has been new to me and I am learning a lot about retail/commercial leasing. I’d really like it to all be over with soon though!
It is different than just renting an apartment (for example). In that case you look at a few apartments, find one one you like, ask the landlord how much it is, and say yes I’ll take it or no I won’t and then you are set. You sign the lease and move in. Pretty easy.
Not quite so easy with retail space. First of all, it is hard to actually see some of the spaces. Making appts to meet 3rd party managers, trying to find a time that works for me and my Realtor and then the property manager, and then arrange for keys, etc. It is harder than you think. One space I have tried to look at twice now, they somehow have lost the key for it. Not sure if somebody walked off with it, or it got mislabeled, or left in somebody’s car, or what. But no key. It seems like they might have some difficulty renting that space if nobody can get inside to look at it. If it were me, I would just rekey it, but they are apparently holding out hope that the key will magically reappear.
Then there is all the rent stuff. Retail is priced $$ per SF per year, payable by month. They give you an appx range of $$ that they would like you to pay. This can be negotiable. Then there is the NNN (triple net) which is also priced $$ per SF per year, payable by month. This can be a set rate OR a variable rate. This is what pays for parking lots, lighting, common areas, etc. This can vary greatly from one location to another one. This is not usually negotiable. Then you have the lease length. This is also given in apprx years that they are hoping for, which for retail typically starts at 3 years minimum.
You also have to add in any ‘tenant finish’ items you want. You know, like painting, carpeting, lighting, cabinets, etc. You can opt to pay for it yourself out of pocket, or you can try to negotiate for this amount to also be included as part of your lease agreement. If it isn’t a large amount, the landlord will usually help you out so they can get a tenant in the space. If you are willing to sign a longer lease agreement, you have a better chance of having these items paid for.
Then you have to submit your lease agreement offering (listing all of the above items and what you are willing to pay, etc). Then the management company will submit your offer to the owner who will decide if they like it or not. They may also require financial info from you, and a background check, and still decide that they don’t really like your offer. So then there is a counter-offer and back and forth.
It is just like buying a car. I don’t like that back and forth and back and forth stuff. Just tell me the price and the terms and I’ll say yes or no. It is really quite simple that way. But I guess if I want a space, I have to play the game.
I have at least narrowed the search down to one particular place now. But now we are on to the real ‘game playing’ time of it. I don’t want to be giving out any addresses or timeframes or other details, just in case they decide they don’t like my offer.
I am excited to be getting closer and closer to the storefront being a reality! YAY!
I’ll keep you posted!
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- Retail Store Quest (bluetwigstudio.wordpress.com)