Looking to Lease Retail Space? Here’s What You Should Know

When it comes to leasing retail space, a lot of factors and consideration goes into it, especially for commercial leases. It is one of the most difficult decision you’ll have to make when starting a business or relocating to a new location. To find a retail space, you first have to understand how you are going to use it. Your business demands are what will define the amount of space you’ll need. Then you can go ahead to set a price range you can afford and start shopping for properties within your budget. However, before settling for retail space, make sure you’ve gone through the lease terms to find out if they are negotiable.

Factors that may affect your leasing retail costs

• the Location, retail spaces in highly trafficked and visible areas such as the malls, hotels, shops and banks will significantly increase the lease costs. Although you’ll incur expenses on renting such as space, your business is assured of high foot traffic. In addition, parking spaces, security and other special amenities are factors that can also impact on your lease charges.
• the State of the space, when leasing retail space, get to know if it’s a newly built space or it had a tenant initially. This is important because a space that was previously occupied will perhaps need some renovations and improvements before you can move in. Similarly, a new space means that no remodeling is needed, hence, you are going to pay a little extra.
• the Lease term, whether you are leasing a warehouse or a small retail store, it’s important to consider how long you are going to use that space. Typically, the longer you lease a space, the more you are able to negotiate. An ideal lease term is 1 to 5 years, below that, you’ll have difficulty bargaining.

Other than your monthly lease payment, there are other costs you can expect to incur when leasing commercial property. They could be one-off payments or recurring.

Property taxes: This is perhaps the most common type of cost and it vary by state. It’s levied by either national government, state or municipal council.

Insurance: Depending on the commercial property you’ve leased, there are a number of insurance covers that may be involved. However, the premiums payable will depend on the size of the retail space and the charges are usually computed per square foot.

Maintenance cost: In other properties, tenants equally share the cost of maintaining the common areas within the property. This could vary based on locations and the upkeep needs.

Utilities: Rent is just on the operating costs you are going to incur for leasing retail space. Other operating costs include water, heat, power, internet among others.

With these few ideas, you are able to find the right retail space to lease and grow your business to the next level. However, you should know that commercial real estate development is different from residential development and so are their leasing approaches. Take your time to find the right retail space for your needs.