Renting Commercial space

[Ted Daley]

Hello Everyone,

I am currently in the process of opening a pack-and-ship store and am seeking a suitable rental space. I have identified an ideal location, and the agent has informed me that the rent is $45 per square foot NNN, plus an additional $5 per square foot.

Upon calculating the total annual cost, it appears that I would be responsible for over $80,000 per year. I would appreciate any advice or suggestions on how this figure might be reduced or if there are any terms that could potentially be negotiated.

Thank you for any assistance.

[Jameson Sullivan]

Unfortunately retail vacancy is at a historic low. Retailers for the most part have had very strong sales and have been opening lots of new stores. In addition to that, lots of retail has actually been demolished over the past decade to make room for higher density projects, like apartments.

That said, most retail landlords with high quality shopping centers aren't dying for deals. I don't really have enough information from you to give you very specific advice, but I can say that if there is any room in the rent, it's probably only a couple of dollars PSF which isn't going to drastically change your overall monthly nut to crack. I would first encourage you to hire a retail leasing broker in your market. This is free to you as the Landlord generally pays commissions to this broker. Secondly, I think your better off trying to push for a larger concession package (Free Rent, Tenant Improvement Allowance) than you are trying to beat them up on their rent. Landlords want to keep the rent up as that is where the value of the asset is derived. Lots of landlords would rather leave a space vacant for another 6 months and wait for the right deal than to lease it at below what the space could ultimately get. 

Best of luck.