Negotiating a retail lease follows many of the same principles of a traditional commercial lease negotiation but, there are a few caveats. The most obvious of which is that your space, as a retailer, will probably exhibit some qualities that are significantly different from that of say, a law firm. Listed below is a guide to a retail lease negotiation and how to get the most bang for your buck.
3 Steps to Help You Get the Best Retail Lease
1. Determine Your Budget
Before you start searching for your next retail lease you may want to determine your budget and if that budget will provide you with a location that is beneficial for your business. The right location and space are essential for long term growth but, if you’re looking for something more temporary you can downplay the importance of those two factors. Just remember, as you move from place to place it will be difficult to maintain any kind of relationship with your customers.
Let’s get back to the topic of your budget. Most retail businesses spend around 2.89% of their gross sales on rent. While that is in no way a concrete number that you should expect to spend, it will give you an estimate of what you may end up spending.
2. Find a Space that Fits Your Needs
Like we mentioned above, finding the right space will help you maintain a consistent relationship with your customers (because you won’t be moving from place to place) and put your business in a position to succeed. Unfortunately, those properties are also typically quite expensive. If you can look past all the bells and whistles of those more expensive properties you should be able to find a retail lease that suits your needs. Bathrooms, dressing rooms, additional storage space, square footage and proximity to high traffic areas should all be taken into consideration as you begin to move on to choosing a business location.
3. Negotiate Your Lease
After you have found a suitable retail lease it’s time to move on to the negotiation stage. This stage can be a little tricky if you do not have any previous experience negotiating a commercial lease so you may want to look for some outside help. A local broker and a retail-experienced attorney can work wonders to help you get the best retail space for the least amount of money thanks to their previous knowledge and experience.
By considering the right variables (budget, space, location) and having the right personnel on your side (a local broker and retail-experienced attorney) will increase your chances of getting a beneficial retail lease. For more information about commercial lease negotiation and local commercial properties please feel free to give us a call at 516-248-6905. We look forward to hearing from you!
