Retail/Office Space - Trying to find Renter

13 Replies

I have a relatively small retail space for rent in Hudson county, NJ, it's approx 1,440 sq ft. I'm having a tough time finding a renter. Does anyone have advice on a marketing campaign that has worked? I've tried CL, as well as listing with a local broker. It's a plain vanilla box, but I'm willing to negotiate with anyone who comes looking for a fair deal, including doing necessary improvements for a business if the rent is right. Today I started "cold emailing" a few local businesses in town seeing if they're interested in moving to a completely redone building. Any and all creative ideas are welcome (including the types of businesses I should directly market to), thanks!

If you work with a local broker, make sure he is a commercial broker with access to post on the listing services, like Loopnet and Costar.  And make sure he has a platinum Loopnet account, which allows everyone to see the listing (non-Platinum members' listings can only be seen by a select few people).  

Make sure the marketing brochure on Loopnet or Craigslist highlights all the positives about the property, with good clear photos and who the neighboring tenants are.  If you are close to a Starbucks or McDonald's, or other national tenant, then make sure you advertise that fact.

It may be difficult to find a broker who will enthusiastically take on the listing, since the space is pretty small, which means a smaller commission.  I think your best bet would be to find a young broker who is new to the business, who is hungry and eager to take on a listing.  He should work for a firm who will provide him with the Loopnet and Costar accounts to property market your property.  Check out the Retail Brokers Network for an affiliate brokerage in your area.  All the firms in RBN specialize in retail real estate.  A good broker will create an attractive marketing package, and proactively reach out to tenants that would be a good fit for your center.  A mediocre broker will just post on Loopnet and wait for the inquiries to come in.

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Yeah that's tough. Hardly any money in leasing especially if it's not national tenants and urban core to strong suburban areas with higher per sq ft lease rates.

If the property is out there and old town type areas with mom and pop tenants expressing interest the rent per sq ft tends to be really low.

If a tenant signs for instance a 3 year lease for 1,440 sq ft at 11 a foot that is 15,480 a year X 3 = 46,400

4% fee to leasing broker of 46,400 = 1,857.60 all in before that leasing broker gives some to their brokerage.

As you can see this doesn't make a broker or agent jump for joy. Perform a "void analysis" which is to look at your space and see in town what would be the best tenant that is not around that could go in there. Additionally you might need to "pound the pavement" locally and hand out fliers to talk with business owners and managers if they would want to move to your location etc.

The first question to answer is who should be in that space.  Is it more retail oriented or tends toward an office space?  Does the property experience a lot of pedestrian traffic or is it more of a destination location?  Who are the tenants currently in the property and also surrounding properties?  What business is missing from that group for which your space would be well suited.

Once you address these items you will have a much better idea on who to target for your space as opposed to an open call broadcast approach.

Peter,

I'm in a similar situation as you. I own and rent office space from 600-1900 sq ft here in south jersey. I have about 10k total sq ft in two office parks here. 

My three best ways to rent are, in order:

1) custom made signs that fit into the unit Windows. 

1a) one color two sided yard signs

2) Craigslist. 

I've been pretty lucky as I've not had an issue filling the space with the 3 methods about in the last 5 years. 

Brokers don't work as the others mentioned due to little cash for them in the lease. 

I lease anywhere between 2-5 years and make sure I'm priced right with good clean product. 

Good luck. 

Peter - Here are the major retail leasing brokerages that cover northern NJ: RJ Brunelli, Ripco, Katz & Co., Sabre Real Estate, RK Futterman, Welco Realty, and The Goldstein Group.  They all rep major retailers, which they will show on their website. But they will also rep local successful retailers which won't show on their websites. If one of these firms brings you a deal with a major tenant, I would anticipate you will likely pay 5-6% of the base/initial lease term, paid half at lease execution and half at rent commencement.  

What more can you share about the property? What other recognizable retail is near it? Is it a single tenant or multi-tenant building? Street retail or a strip? Can you say which town specifically - like Jersey City, Hoboken, etc? Normally, I would ask about population density and income, but this shouldn't be an issue here. 

Thanks everyone, it's a single vanilla box underneath 2 apts.  It's a busy auto traffic area, on Schuyler Ave in Kearny, but not much foot traffic. I'm willing to pay the commission to get a tenant in there.  The 2 apts are just enough to service the debt, so anything left over will now be positive cash flow.  I don't think I can post the CL link, but attached are 3 pics, 1 of the building, 1 of the space, 1 showing the window signs.

Hi Peter - Based on the pictures provided your space would be geared toward small mom & pop tenants only, if retail, and not to chain stores. Most tenants looking at this type of space, would probably only look at a 1 year lease - you may get some that would do a 3 year lease.  The question I have is do the numbers on a 3 year deal proforma out when providing some free rent (after tenant opening), in lieu of tenant allowance? Personally, I would not recommend giving TI here.  Also, regarding brokers, this space would be geared more towards brokers doing small commercial - KW Commercial or another residential firm that does some commercial, as an example.  For commission, for this space you could probably do either an "as collected" commission where you pay as the rent gets collected, or maybe a hybrid where you pay some portion up front and the remainder over time, or depending on the deal, sometimes even 1 month's rent. 

@Peter Kraft I am having the same challenge here in Bergen County, New Jersey.  Due to the poor U.S. economy, small office and retail storefronts are very slow-moving these days (currently there is an average 18 month vacancy rate for retail storefronts).  I continually post these spaces on Craig's List, Loopnet and the NJMLS.  I also have a lot of signage in the windows.   Your space looks as though it would be perfect for a small hair salon, nail salon, tattoo parlor, or insurance agent.

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Hi Peter,

First off, it looks like a wonderful space that a creative tenant could really make good use of.  I've posted on BP about leasing commercial space as well as I'm also interested in how to do it when the conventional channels of using a leasing broker are not great.

One method that I have seen some modest success is with generating local leads on my own.  For my particularly property I was targeting specific business types (in my case mom and pop wine stores or kids indoor gym/playground).  I basically paid a offshore person using upwork.com to mine email addresses.  I asked for emails, owner names, location, etc.  I paid about $50 to compile about 100 email addresses and then I sent out a simple targeted mass email using gmail.  I was surprised as I actually got a decent response rate and received 3-4 emails of interest.

Nothing has been leased yet but I have been talking and negotiating with several prospective residents.  Maybe that could work for you if you are inclined?