When your business makes the decision to expand to new location, you want to maximize every dollar to grow your chain profitably. Merchants need to be savvy about how to lease retail space that nets them the best deals. Don’t overlook the value of people counting technology when you’re thinking about inking your next real estate lease.
First and Foremost: Know Your Budget
Many companies make the mistake of overspending on real estate because they think they simply must be in a certain location. The bottom line, though, is if you can’t afford it, it’s not worth it. When learning how to lease retail space, evaluate your current sales and income to determine what a practical real estate budget should be for your planned expansion. Traffic counts from existing locations can help project what foot traffic might be at the new store you’re envisioning.
Pick the Right Location
It’s a tried and true saying that your success boils down to location, location, location. Setting up shop in any given location can make or break your store so be careful to choose wisely.
This is where traffic counting technology is really a benefit. A key step in learning how to lease retail space is evaluating foot traffic numbers for the location you’re interested in. Be wary of landlords who hem and haw about sharing foot traffic data — it could be a sign that the location you are considering doesn’t draw the kind of crowds you’re hoping for.
Needs Versus Wants
Like Goldilocks, you want your new store not to be too big or too little — but just right. Take a good, hard look at what you really need, not what you want, to be successful in your new location. How much space is just enough? How much space is too much? Retailers that know how to lease retail space don’t sign up for more store than they need. What’s more, they understand the conditions that work for them: do they need a move-in ready four walls or do they need to build out the space to their custom specifications? Set your expectations early and stick to them throughout the leasing process. Be sure you can accommodate the various aspects of your store environment, such as stockroom, office, restrooms and fitting rooms.
Of Brokers and Negotiations
If you’re pressed for time or aren’t confident in how to lease retail space, consider partnering with a real estate broker who knows the ins and outs of the trade. Leverage their expertise to your advantage; they likely have years of experience in securing the best deals with the most retailer-friendly terms. Don’t forget, though, that brokers charge a fee, so factor that into your overall budget.
It should go without saying that you must negotiate your lease — or at the very least, try. You don’t get what you don’t ask for, so counter any offers with the terms that top your priority list, such as:
- The length of your lease. The longer the agreement, the lower your rent could be.
- Paying up front. By prepaying your rent, you can make a good case for reducing your monthly rate.
- Location near competitors. Potential landlords might be swayed when you demonstrate that the space they have available is (or isn’t) close to your competition.
Anyone can learn how to lease retail space successfully by doing careful research, leaning on hard numbers from traffic counting data, and seeking out seasoned partners such as real estate brokers who are motivated to get you the best possible deal.