Q4 Real Estate’s Jason Rogers and Craig Buyers bring you another informational video. This time they are walking through a checklist of important information to have available or at least be aware of when you are a potential tenant calling a commercial real estate broker.
Scenario #1: (Jason) I’m a potential tenant opening a small wine shop, looking for approximately 800 – 2,000 square feet. Should I have the square footage nailed down or is this a pretty good range?
(Craig) That is a pretty good range as long as you have that within your mindset of how big you want the shop or the size you need to have. This information helps the commercial real estate broker nail down potential locations for you. You do not need to have the exact square footage as that might ebb and flow as you create your business plan. But if you have it within 500 square feet of what you are looking for, that helps us find a location.
(Jason) So when it comes to their business plan, is that something they should have financials available as well?
(Craig) Yes, you should kind of have a business plan outline and probably your financials readily available. The reason that is important is because a landlord that you are going to sign a lease with has invested in your business and they want to make sure you are going to have a successful business.
The landlord wants to make sure you are going to succeed within their real estate and obviously continue paying them rent. So that is why having your financials and the business plan put together is important. It also shows you are serious about your business and you are serious about opening. Other important information is term and the time frame you are going to lease as well as when you are going to get in the space to actually starting to pay rent.
The base term of how we address it can ebb and flow and a lot of factors can cause longer terms or shorter terms, but our industry standard is anywhere from three to 10 years is expected to make that kind of commitment within your business. As for timeline, its good to have an idea of when you would like to open your doors and start having employees and customers. That helps us decide on first generation space or second generation space. Knowing when you want to be in the space helps us choose location for you.
Scenario #2: (Jason) I’m a potential tenant opening a wine shop and I want to be right next to the grocery store that is in the center. All these commercial brokers are asking me what my use is and I don’t want to tell them. Do I need to tell them?
(Craig) Unfortunately, you do and the reason is per your example. Let’s say you are a wine shop and you want to go next to a Trader Joes or Hy-Vee that anchors the shopping center. A lot of anchor tenants do have use restrictions and while you might just be a 1,000 square foot wine shop, they don’t want to lose customers to you. They want to make sure the customers are going through their wine and spirits departments to make those purchases. So your use does have an effect on the shopping center or the development as a whole. By sharing your use with us, which will remain confidential, it helps us select a location and explain to you that you cannot locate your business in this center, but we do have another potential commercial real estate property that would be perfect for your use. With the larger anchor stores, they typically do have a lot of use restrictions and even some of the smaller tenants as well.
We appreciate you guys tuning in. Thank you very much!
You can watch the informational video, Realtor Talk Information to Have Available when Calling a Commercial Real Estate Broker with Craig and Jason below.
For more helpful information check out our blog post titled: An NNN Lease Versus a Gross Lease: What’s the difference?
Let one of our knowledgeable listing agents partner with you to find a commercial real estate property perfect for your business needs, and assist you in working through the lease process. Contact Jason Rogers or Craig Byers today!