March 3, 2021 | Written by: Robyn Swihart, Owner

1.      Not adhering to established physical site criteria

a. A site search should begin with defining the physical site requirements.  You should be able to answer these questions:

i.     What size of space is most efficient for my operation? How much space do I need minimally to operate?

ii.     Does my business have special regulatory or zoning requirements?

iii.     What levels of utilities (water, sewer, gas, electric, cable & internet, HVAC, grease trap and/or exhaust) does my business need?

iv.     What are the parking requirements for my business?

v.     Is my business convenience-driven or a destination?  Will my customers seek me out?  And how does that play into access and visibility to my site?

vi.     What configuration of width and depth is ideal, and what type of property do I need:  freestanding, inline, or endcap?

b. Once you define your criteria, understand if the items are absolute requirements or preferences, and if preferences, weigh the importance of each item.  Don’t waste your time on the spaces that don’t meet your critical requirements, and be wary of accepting space that compromise customer experience, or create excessive remediation costs.           

2.      Making an emotional-based site decision

a. Ground your real estate choices in research.  You are not leasing a commodity space, where each site of similar size gives you the same revenue potential as the next.  A retail location in the wrong trade area, or even on the wrong side of the road, can spell disaster.  Where your customers live, work, and shop is paramount.  Seek trade areas with appropriate levels of population density, median household incomes, daytime population, and other demographic metrics.  Target sites adjacent to where your customers are already shopping.  And, have a budget based on your projected revenue.  Some common mistakes we warn against include making site decisions solely based on proximity to your house, becoming enamored with an over-budget new construction space, falling victim to the Tenant Improvement Allowance trap (landlord offers above market allowance in exchange for a high lease rate), and letting the site decisions of competitors overly influence your strategic site choices.  

 3.      Not planning for future growth

a. Define your trade areas and ensure that any proposed location does not impact future growth opportunities.  Consider this:  You select a ‘tweener site between two dominant trade areas.  You may no longer be able to open locations in the preferred areas because doing so would cannibalize sales at your existing ‘tweener site to an unsustainable level.   

Too often we see retailers compromise their physical and qualitative site criteria in heat of the moment negotiations, or in a rush to secure a site.   We’ve only just discussed the tip of the iceberg in this post.  A reputable tenant representation broker should provide you with comprehensive market data and analysis tools to help you find the best site possible. 

If you are interested in opening a new retail location, reach out to rswihart@equivis.com to discuss the process further. 

Disclaimer:  This article should not be seen as legal advice.  Please consult your attorney before you rely on this information.