A Step-by-Step Guide to Leasing Your Dream Retail Space

Published: 07-03-24    Category: Leasing/Renting

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

An “Open” sign on a retail store window.

Have you decided to turn your passion into a career by opening your own retail business? If you answered “yes,” you're at the right place.

Chances are you're excited about welcoming your first customers but unsure how to find and rent the ideal retail space.

Here, we'll take you through the process in everyday language. You'll learn how to:

  1. Choose the right neighborhood;
  2. Check out potential customer traffic;
  3. Determine how much space you'll need;
  4. Turn your notes into a business plan;
  5. Locate potential retail rental spaces; and
  6. Understand the clauses in a typical commercial lease.

You'll also be able to try out what you've learned right here at MyEListing.com.

By the time you begin Step #1, you should already have decided on the type of business you'll open and have your financial backing and permits in place.

Let's say you've noticed that boba tea (also known as bubble tea) is popular in your neighborhood, but you and other boba fans drive several miles to buy one.

You've learned everything you can about this drink, including the costs of ingredients. You also have experience managing a coffee shop, so you're aware of the pros and cons of this kind of business.

Now it's time to take your bubble tea to the drinkers.

Step #1 – Choose the Right Neighborhood

This depends on several factors. Will your shop be easy to reach? Since most boba tea fans are in their late teens and 20s, have you found some popular hangouts for this age group?

Equally important, do they have reasonable amounts of money to spend?

This type of information is called demographics. When you're ready to surf the retail space listings here, each listing contains demographics that tell you how many 20-to-29-year-olds are nearby, together with estimates of household incomes.

The next step: checking out foot and vehicular traffic nearby.

Step #2 – Check Out Potential Prospect Traffic

While some customers will visit after they see your Facebook or Instagram page, others will drop in because you're near other businesses they visit or near their workplace.

Since your business will need new customers to thrive, finding data that provides accurate estimates of passersby will help you locate retail spaces with plenty of people around, some of whom will already be boba fans and others who want to try it.

Before you begin checking out retail spaces here at MyEListing.com, you need to decide how much space you'll need.

Step #3 – Calculating Square Footage

Since commercial retail space is priced per square foot, carefully estimate your needs. What sort of equipment will you need, and how much space does it take up? How much storage will you need for ingredients and supplies?

You'll also need to decide whether to offer a seating area or operate a take-out-only business. Parking for your customers is another factor to consider.

Your past management experience will be extremely valuable when you're making these notes. Now, it's time to put your plans into writing.

Step #4 – Turn Your Notes Into a Business Plan

This may sound time-consuming (and boring!), but completing a basic business plan is worth every minute.

This business plan template will help you put everything down on paper, including things you may not have considered:

  • Advertising and marketing plans and budgets;
  • Costs of setting up shop, including one-time expenses; and
  • Your initial budget (most new businesses take 18 to 24 months to become profitable).

After you've drafted an initial plan, you'll see where you may need assistance or advice. This can come from your bank manager, financial backer, or former boss.

There are also affordable online courses for newcomers to the retail business. Udemy is a good place to start, and so are any nearby universities and community colleges.

When you have a completed business plan, you're ready for the fun part…finding your business' home.

Step #5 – Look for Potential Retail Spaces

By now, you've probably identified several neighborhoods where your boba tea shop will be popular.

Checking them out here at MyEListing.com is easy, as you have several search options, including:

  • Searching by city, county, state, or zip code;
  • Limiting your search to retail-zoned properties;
  • Entering your preferred price per square foot; and
  • Entering your preferred size.

Be sure to check out the demographics for each listing, especially the numbers of residents aged in their teens and 20s.

Once you've made a shortlist, it's time to begin calling the listing agents for each one. Like residential rentals, you'll probably be invited to visit each one in person for a walk-through.

When you make your decision, it's time to become familiar with what your lease will contain. Since these can be complex, the next step is for you to learn about commercial lease basics.

Here are details of what your rent payments may include when you sign a commercial contract.

Step #6 – Determine Your Monthly Rent Costs

Unlike an apartment lease, a commercial lease offers several different options for monthly rent payments.

  • A triple net lease (shortened to NNN) is a lease agreement where the tenant pays all expenses, including taxes, building insurance, and maintenance fees. These are in addition to rent and utilities.
  • A single net lease adds property taxes to rent.
  • A double net lease will have these taxes plus property insurance.

Since an NNN lease includes considerably more than the rent price per square foot, these may appear to be a bargain.

This is why it's essential to bring a calculator and be prepared to negotiate.

Still Need Assistance?

Working with a commercial real estate agent or broker can be a smart idea, and you can find the right one right here.

MyEListing.com maintains one of the largest national databases of commercial real estate agents & brokers in the country. Use it for free to find an agent or broker near you.

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