Selecting Space Variables

Once you have narrowed down the search to a few prime location candidates, there are specific variables that should be considered.  This section of Premier Retail Support's website was included to share a list of variables that most national tenants consider when selecting a specific space. No single shopping center or free-standing location has all the qualities of a “perfect location”. 

By using the list provided below, you should be able to prioritize the available locations you’re considering.

The bullet points should be self-explanatory but in the event you have a question, please contact us.
1.       Visibility of Space: Is the sign band hidden behind a row of trees?

2.       Accessibility of Space: Right in, right out? Or full access.

3.       Store Size: Don’t pay for a space that’s too big. What size do you really need. Prepare a test fit layout.

4.       Store Frontage: Example 20’ x 90’ and 30’ x 60’ are both 1800 feet but 30’ x 60 has 50% more frontage.

5.       Column Placement: Look inside the space. Does it have a column you’ll have to contend with when you prepare a test fit layout?

6.       Base Rent: Have you also checked nearby shopping centers to compare asking rents? You should.

7.       Pro Rata Charges: Ask for a cap on controllable expenses to try and limit your NNN charge annual increases.

8.       Percentage Rent: Ask for an artificial breakpoint vs. a natural breakpoint. Or ask to just report sales quarterly and request no percentage rent.

9.       Term length: 3 years, 5 years, 10 years? How long of a term do you want or need?

10.   Options: Did you ask for 1-2 options. You should.

11.   Rent Start Date: Did you ask for enough build out time? If you didn’t you’ll be paying “dead rent” vs enjoying free rent.

12.   Tenant Improvement Allowance: Is the landlord going to contribute “dollars” to bring the existing conditions up to a vanilla shell?

13.   Utilities: Do you need 200 amp service or 400 amp service? What is there now? Who will be paying for the upgrade in electrical service?

14.     Co-tenancy Clause: Are you waiting for the anchor to open to generate traffic? Did you ask for a anchor opening co-tenancy clause?

15.   Exclusive: Did you ask for an exclusive so you’d be the only “use” of your kind in the center? No one wants a competitor alongside you.

16.   Use Clause: Is what you are going to sell well defined. Is what you are going to sell tomorrow what you will be selling in 5 to 10 years? Your use clause defines and protects your flexible in what you can and will sell.

17.    Relocation Clause: Do you have one, where the landlord can relocate you after you open? How is it defined? Who pays for what? It all needs to be defined.

18.   Sales Kickout? Did you know you could ask for a provision that in the event you don’t achieve a negotiated level of sales you can terminate the lease?

19.   Permit Contingency: If the city holds you up and you can’t get a permit to start construction did you ask for a permit contingency so your rent won’t start?

20.   Personal Guarantee Language:  For how long are you liable to keep paying rent, if you close your store? 
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