The Guide to Choosing Your Next Retail Space

Where do retail owners begin when it’s time to find new commercial property for lease? It’s crucial to think through your needs, follow the right site selection steps, and avoid mistakes.

What are your location needs?

Before looking through listings or scheduling a showing, business owners must know what they need from store space to rent. Without a list of must-haves and requirements for your industry or business type, you risk wasting time looking at commercial properties that aren’t the right fit. You also risk signing a lease for a retail space in a neighborhood that can’t help your business success. 

Take time to ask plenty of questions and think through the business you plan to open, how much space you need for employees and customers, your target clients, and what you need in a location now vs. what will serve you well as you grow. Your next (or first) location might not be your ultimate destination long-term, but it should be a place that sets you up for long-term success!

Follow tried-and-true steps

Even though it might feel like you’re going into uncharted territory, you’re not the first business owner to look for retail space in Manhattan. So, there’s no need to forge a new path into the unknown! 

Following best practices during the site selection process can help you save time and money. If you’re not sure what these steps are, connecting with other business owners in the area or a professional commercial property broker can help you stay on the right path. 

To work through the site selection process, conduct a needs assessment and market survey. Tour sites (in person—not just online) and ask questions to confirm that a space can meet your needs, deliver customers, and fit your budget.

Avoid mistakes

While a flawless process from start to opening your new doors is probably too much to count on, it’s important to avoid critical mistakes when choosing retail real estate to rent. 

Relying only on photos (without a site visit) to judge a space and measuring square footage incorrectly can be costly errors that cause problems after signing a lease and moving into a location.

We’ve covered some of the basics to help you get started on your search for the ideal community for your new business! However, finding a retail location and signing a commercial lease is often more complicated than finding and renting an apartment for residential purposes.

How much space do you need? 

Settling for a storefront or restaurant that doesn’t meet your space requirements can be costly for a couple of reasons. First, without enough space, you won’t have room for enough employees or customers to bring business into your shop. However, with too much space, you’re overpaying for a location that your customer base can’t support. 

Carefully research the ideal amount of space you need for your business now—and to help you grow toward long-term goals.

What’s your budget?

With an idea of the amount of space you need, it’s time to think about your budget. Commercial rent rates are competitive in the Manhattan area, so it’s crucial to analyze your finances and business plan to find a place you can afford (and that serves you well). 

How should you handle buildout?

Most commercial spaces aren’t move-in ready or set up for you to open your doors immediately after signing the lease. Business owners must think through the buildout process to budget accordingly and design a space that fits your brand and goals. 

Whether you use your landlord’s buildout project manager or bring in your own team, don’t leave this critical aspect of finding the ideal commercial space as an afterthought.

Should you go wireless?

What are your connectivity needs to operate your business successfully every day? When touring a site and talking with the landlord, ask plenty of critical questions about the building’s wiring and connectivity for internet, television service, and landline phones. 

If a commercial property seems ideal (but doesn’t have the outlets and wiring you need to get started), consider going wireless to save time and buildout expenses.

Is subletting a good idea?

Suppose you’re starting as a very small business, or you just can’t seem to find the right space with a lease that meets your needs. Should you consider subletting space from another retail tenant? 

It depends. First, make sure subletting isn’t a violation of the original lease. Then make sure you’re okay with the constraints of a space you might not be able to build out to your specifications. You might also lack any wiggle room to negotiate lease terms when subleasing from another tenant. There’s also a risk that your space won’t have everything you need if it’s simply part of a location rented by another business owner.

Are you familiar with the lingo involved during the site selection and commercial leasing process? You’ll thank yourself later after getting to know a few terms that can help you understand square footage and critical lease elements. 

Rentable vs. usable square footage

Did you know there is more than one type of square footage to consider when considering store space for rent? If you’re not sure about the difference between rentable vs. usable square footage, a commercial real estate broker can help you define those terms and how they impact rental rates and lease details. 

The "Good Guy Guarantee"

Retail tenants can benefit from good understanding of The Good Guy Guarantee when working through commercial leases. Again, if you’re not sure how this clause can impact your retail lease, reach out to a commercial leasing agency to walk through this Guarantee and how it works. 

Commercial building classes (A vs. B vs. C)

What type of building is best for your business? Understanding the differences, pros, and cons of A vs. B vs. C-class commercial properties can help you identify the best classification for your business and future growth. Learning about building types can also help you save time by ruling out buildings that are either too expensive for your budget or might require too many renovations to serve customers well.

We mentioned that the commercial leasing process is different from finding an apartment and signing a residential lease. Retail business owners must understand what they can (and can’t) negotiate and how commercial leases work before signing an agreement for retail space for rent. 

Connect with other business owners or a commercial leasing expert to learn about things like the Tenant Improvement Allowance and if it’s negotiable. You might also find that you’ve fallen in love with a specific location and it’s ideally suited for your business, but before you could complete the leasing process, the landlord changed their mind about allowing your business in the building, decided the negotiations were taking too long, or the current tenants decided not to move out—leaving you without the space you wanted for your business. 

Losing a lease is tough, but there is a way to reduce the potential of missing out on a location and neighborhood you worked hard to find for your business!

A DIY approach to finding commercial space can seem like you’re saving money and taking things at your own pace. However, many business owners quickly realize that trying to scour listings, conduct market research, set up showings, and negotiate the lease is too overwhelming to take on without expert help. 

Partnering with the right commercial leasing broker helps retail tenants save time and money! It’s also the best way to avoid some of the mistakes we’ve mentioned and ensure that your new retail location is the very best place and community for your business to thrive. 

However, not all full-service commercial brokers offer the same level of service or commitment to building better communities throughout Manhattan. When searching for the right experts, be sure to ask plenty of questions and partner with an agency that listens to your goals and connects you with a landlord looking for your type of business for the neighborhood!

With the help of professional commercial real estate agents, you’ll find the ideal spot for your business! Then, after moving in and as your shop or restaurant begins to thrive, make sure you’re a good tenant in your new space. Being an excellent retail tenant helps build a good relationship with your landlord and the surrounding community.

We hope this information is helpful as you search for the best location to start or relaunch your business! Verada’s mission is to connect businesses with ideal communities and landlords that work together building better neighborhoods. 

Learn more about how to find your perfect space when downloading our free resource, the “Guide to Choosing Your Next Retail Space!”