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Should I consider leasing retail space in a strip mall?

| Jun 28, 2017 | Commercial Real Estate

Location is a key factor in your New York retail company’s success, and finding a building on a commercial property that also accommodates other businesses may improve your foot traffic. Affordability starts with the monthly payment, but if you fail to read the lease carefully, you may miss other factors that will destroy your bottom line and jeopardize your success. According to the Small Business Administration, here are things you should consider when negotiating your lease.

Do not assume that your landlord will take care of maintenance and repairs. In fact, depending on the lease, you could be on the hook for some or all of these. You may even have to contribute to the costs of upkeep on spaces shared with other businesses on the property, such as parking lots, lobbies or sidewalks.

You may expect to pay your own utility bills, but that may not be the case. Or, at least, it may not be that straightforward. How these are handled varies from lease to lease, too. For example, are you only responsible for those you use, or are they divided among everyone on the property? You may have to pay a percentage based on your square footage.

Extra costs are not the only threat to your business. Having a competitor move in across the parking lot could eat away at your profits. One way to prevent this is to ask the landlord for an exclusivity clause that keeps him or her from leasing your neighboring space to the competition. While these considerations may be useful to you as you search for a building, this information should not be interpreted as legal advice.

 

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