by: Peter D. Morris CRX, SCLS, SCSM, SCMD
Greenstead Consulting Group
Specialists in Commercial Real Estate Training and Consulting
Once you have selected your general area or areas it is time to drill down and find current or future space availability, depending on your timing.
In this step we marry the criteria you’ve established in Step 3 with the location analysis you’ve just completed to select a few potential spaces for your business. I advocate always seeking more than one potential location and negotiating on at least two spaces concurrently, in case one negotiation falls through. This also gives you both a personal psychological advantage during the negotiation as well as true negotiating leverage.
There are several ways to seek out vacancy. These include searching for “For Lease” signs, going onto several commercial real estate brokerage websites, checking the Multiple Listing Service, the local newspapers and online sites such as SpaceList.ca, Craig’s List and Kijiji. You will find that specialized commercial real estate listing websites, such as SpaceList.ca have a broader selection of property than general ‘classified’ sites such as Craig’s list. My own experience has been that the properties found on ‘classified’ sites do not meet the needs of all lessees.
Many online search agents, such as Spacelist.ca allow you to filter the results by type of property and available space size.
Develop a short set of interview questions based on your criteria prior to contacting the leasing agent for the properties that appear interesting. The questions can quickly weed out locations that appeared to meet you requirements, but upon further investigation don’t suit your business. It is better to do this from behind a desk than on a site tour, as it won’t waste your time, or that of the agent.
For example: ask about the electrical capacity of the space if you require a certain amount. Don’t forget to ask about the availability of the space too. Many times landlords are aware a space will become vacant in the future and will be proactive in listing it several months in advance.
During my time representing landlords I came to know unsophisticated prospects by the first question they ask. That question was “How much is the rent, and is it negotiable?”
That question is the same as walking into a restaurant and asking, “How much is the food?”
Unless you know if the restaurant serves the food you like, or can eat, the price is meaningless as a first question.
Yes, you will want to discard some properties due to your rent affordability in your business plan and will need to ask about the rent, but it should be near the end of the questions and not at the start. There is also a very important question you need to ask the landlord’s leasing agent after they quoted the rent. It is a question rarely asked, but can give you significant negotiating leverage. What is that question? I’ll answer that in Step 7, which comes after this next, and often overlooked Step 6, which I outline in my next post.