A broker specializing in retail/restaurant real estate can be a huge resource in navigating through these puzzle pieces. And the landlords usually pay their fees, making this service free of charge to the business owner.
20 Key Factors For Finding a Better Location
By David Simmonds – Founder & President, RESOLUTE RE
Finding the right location is one of the most important processes you will be engaged in for your business. Like the old adage goes: location, location, location. Many factors go into site selection for your business. In this article, I’ll discuss the factors to consider about the retail space itself.
Size of space needed
• Do you need an end cap, or are you willing to go in-line? Do you need a freestanding location and/or a drive-thru?
• Construction budget
• Anticipated sales projections Rent is always a function of sales, and most businesses want their rents to be between
6%-8% of their total costs to run the business.
• Rent/NNN budget…make sure that you are realistic about what can be achieved in the market/s that you are looking at
and how that compares to your budget
• Do you need referrals for a general contractor/architect/etc? Do you have a prototype for your layout?
• Which kind of tenants do you want to be around or stay away from?
Interior of the space:
• What size HVAC do you need?
• Do you need the space to come with equipment left behind by the previous tenant? 2nd gen restaurant space, for
example, could save a restauranteur a lot of capital. Or could you do new construction or a plain Jane retail space?
For example, if you would do a non-2nd gen restaurant space, how much would it cost to retrofit a space?
• Do you have to have natural gas?
• What size electrical service do you need?
• Do you need a grease trap or a vent-a-hood
• Does your space need to be sprinkled?
Selling yourself to landlords:
• What kind of credit will be going on the lease?
• Are you willing to personally guaranty the lease?
• Where is your source of funding coming from to do this new location?
• Your Resume: Have you worked for a competitor in the past, or do you have existing stores? If so, how long have you
been in business? If not, do you have a resume showing your operations prowess?
Use a professional broker
A broker specializing in retail/restaurant real estate can be a huge resource in navigating through these puzzle pieces. And the landlords usually pay their fees, making this service free of charge to the business owner. When hiring such a broker, engage in a meaty interview process:
* Ask for and check References
* How many similar-type deals has that agent closed in the past week, 30 days, 60 days, and YTD?
* If he works in other commercial real estate verticals, such as office, industrial, land (not related to retail), farms & ranch, medical or investment sales, for example, how much time does that agent spend working in those verticals versus retail/restaurant?
I highly recommend a broker who specializes in the retail/restaurant field. That broker will have the expertise, knowledge, and relationships in the market to get you the best space for your business. It’s an exciting journey you are embarking on…you’ll never forget it!
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About The Author: DAVID SIMMONDS
David Simmonds founded RESOLUT RE in January of 2009 and has since built a massive, international, 3rd-party brokerage platform. RESOLUT RE has 6 offices across Texas (Dallas/Fort Worth, Houston, Austin/San Antonio, McAllen, Midland & El Paso), and serves the great states of Louisiana and New Mexico out of offices in Lafayette, Albuquerque and Santa Fe.
RESOLUT RE represents 68 tenants nationally/internationally. We have the ability to service our clients’ expansion needs anywhere in the United States and up to 130 countries around the globe.
RESOLUT RE markets over 800 projects and exclusively represents over 250 tenants regionally across Texas, New Mexico and Louisiana.
David is a member of the International Franchise Association (IFA) and the International Council of Shopping Centers (ICSC) and received a Bachelor of Arts degree in Economics from Columbia College/Columbia University in New York City.