Welcome to Episode 33 of the Corporate Real Estate Podcast, brought to you by LeaseSmart.com. Your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances.
Today we’re talking about Retail Leases, which can be very special. There are some terms that are used in Retail what go above and beyond the terms used in Commercial Leases or Office Leases.
One thing that you need to be aware of is that you might be charged for something called “percentage of sales.” So, if your % isn’t high you might get kicked out ultimately.
Also, it is pretty typical for a shopping center type of retail lease to use a base rent and then a pro-rata share of building expenses. So, who is responsible for the expenses of the property. Will the landlord be charging you your share of the CAM charges?
Let’s be sure to inquire as to whether construction is in the horizon. What do the traffic patterns tend to be like at all times of day? Sure, your customers can get in your retail center, but if they can’t get out and turn the way they need to go at certain times of day then the typical customer will go somewhere else. Look at curb cuts, median cuts “no u-turn” signs and traffic lights.
If you are trying to decide between renting retail space in a small strip mall or a larger shopping center remember that visibility might be more important than community. If you can’t be seen in the larger community it might not be worth the higher premium, whereas being prominently located in the smaller pond is a bonus.
Pull reports of drive times and radius levels. Ask yourself, “Will there be enough parking?” Thank you Craig for giving us so much good information to consider!
For more information, be sure to visit LeaseSmart.com
If you would like any free Space Worksheets, Letters of Intent or Proposals then Craig Melby is more than happy to share the documents that he uses. Just e-mail him at firstname.lastname@example.org.