Lease Retail Space
Revision as of 17:47, 15 January 2017 by Kipkis (Kipkis | contribs) (importing article from wikihow)
Leasing retail space can seem like a difficult task when you're starting a business or relocating an existing retail store. In order to find the space, you need to sign a lease that protects your interests. You must take care to understand the lease terms and negotiate them properly.
Steps
- Find a few places that might be suitable to rent. Drive around your town and see which plazas and strip malls you might like, or look for standalone retail space, depending upon your business' needs. Look for signs as well as search online using commercial lease listing sites, such as LoopNet.
- Determine what you can afford per month. The prices for commercial leases are usually put in terms of dollars per square foot per year. For example, the base rent could be $12 per square foot per year. For a 1,000 square foot space, that comes to $12,000 per year. Divide that by 12 to get the base rent per month; in this case, base rent would be $1,000 per month.
- Retail leases can also include common area maintenance (CAM), which adds a dollar amount per month that goes to pay for the maintenance of shared areas, like roofing, parking lots, sidewalks, landscaping and snow removal.
- Leases are sometimes expressed as NNN or triple net. This means that the tenant is responsible for paying the property taxes, insurance and maintenance for his portion of the building. Single and double net leases are also used. This cost is added to the monthly rental price.
- Arrange a walk-through of each property you're interested in. Meet with the landlords to get information on traffic counts, tenant turnover, leasehold improvements you can make and how long the lease term will be. Ask for a lease so you can look it over before you make a decision.
- Choose one property and negotiate your lease terms. This includes base rent, CAM, net fees, commencement date, allowances for moving or leasehold improvements, renewal and termination options, security deposit, exclusive use if your retail space is in a plaza, subleasing options and parking ratios. If the landlord won't negotiate to meet your needs, you may need to move on.
- Hire a real estate lawyer to review the lease before it's finalized. You don't want to get into trouble because you didn't understand the legal jargon.
- Turn in your application to the landlord and give permission for any credit or background checks he requires. Give your deposit as well as any fees or rent payments that are due up front.
- Assume your lease after the landlord approves your application. Start doing construction if necessary and move your retail products, furniture and equipment into the space.
- Put up your exterior signage and advertise that you are opening.
