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    2 Replies Latest reply on Mar 16, 2010 10:09 AM by TheSoloGuide

    Leasing Retail Space

    johnfla Newbie
      I would appreciate some advice on how to lease a retail space. I have already done some research online about leasing a retail space and each site has different opinions about how to do this. It appears that there are 3 main ways of leasing a retail space: 1. contact a lawyer to negotiate the lease 2. contact a commercial real estate agent to negotiate a lease 3. negotiate yourself and then hire a lawyer to review the lease. Each has its own merits and disadvantages.

      I already contacted the listing real estate broker for the retail space to obtain preliminary rates and cam as well as any concessions. They wanted a business plan in order to get an intent to lease. Although I have a business plan, I do not want to just give out my business plan to anyone especially a landlord or the leasing agent because it has confidential information that they can give out to other prospective tenants if this lease doesn't work out as planned. Is a business plan really required?

      How should I negotiate the lease? Has anyone done this before and what method did they used? How did it work out? What concessions (tenant improvement, free rent, time for possession, length of lease, etc) should I ask for and that are typical in today's bad economy especially for commerical real estate?
        • Re: Leasing Retail Space
          Vilnius Industries Tracker

          you could call the number on the sign out front of a retail property
          • Re: Leasing Retail Space
            Tracker

            johnfla:

             


            Working with a realtor of your own (or if your state requires a lawyer) will give you the benefit of having a person negotiating the best terms for you. Plus, a realtor should be able to give you the comps in the area to see if the landlord is asking for reasonable terms on the lease. The other option is to see if the landlord's real estate agent will sign a dual agency agreement. Until they do, they have their client's best interest at heart. By signing the agreement, they have a fiduciary duty to both of you.

             


            I imagine they are seeking a triple net lease or NNN lease. If they require a business plan, see if they are willing to sign a non-disclosure agreement and only review the Executive Summary and your financial information instead of the complete plan. These two sections should give them what they need. Before you hand over the documents, I would ask the real estate agent who the landlord is and if the landlord owns a similar retail business to what you are proposing or if they rent out another space to a tenant who operates the same. This way, you will feel more comfortable sharing business information without worry of a competitor seeing your plan.

             


            If you decide to go it alone, make sure you research online what other leases are going for in your area to know that you are receiving a fair rate. Factors that will affect the terms of the lease include:

             

            • Location, location, location (easy visibility from major streets, ease of access for your prime demographic, parking, neighbors - both good and bad
            • Structural quality of the space (i.e. age of the building, last time new paint, carpeting, tile were added, etc...)
            • Unique features for your line of work (i.e. restaurant space as compared to general office)

             

            I hope this helps for a start.

             


            All the Best,

             


            Doug Dolan

             

            The Solopreneur's Guide

             

            http://thesologuide.com/