Homes & Land of Ottawa

Retail leasing

- Courtesy of The Ottawa Real Estate Board, 2010.

If youre a new business owner or hoping to go into the retail business soon, one of the most important things you will be dealing with is finding a physical space for your store. While you could certainly purchase a building to run your business out of, many retailers lease their space from a landlord and find that it works very well for them. This week we feature some tips for those new to the retail leasing process.

Location, location, location is the phrase most people think of when they start to look for retail space. However, a more accurate catchphrase might be location, visibility and accessibility because these three factors are of utmost importance when selecting your space. A storefront might be in a very popular outdoor plaza or shopping mall, but if it has poor visibility and is difficult to access by foot or by car, your business will suffer as a consequence. Dont lease a space based on the overall location, but on the specifics of the space  whether it faces the street or a parking lot, whether people can see your sign from the road, etc.

Ottawas retail space market is a stable one, which means that prime locations dont last long before they get snapped up. So if you find a location you love, and it works for your business, dont wait too long to grab it or it may be gone. This means knowing exactly what kind of space you need before you even begin looking. Its a smart idea to put together a detailed business plan before starting your property search  Scotiabank and TD Canada Trust both have excellent templates for business plans.

Once you know how much space you need, dont rent more than that. The more space you lease, the more money goes to rent instead of supporting other parts of your business where you may need it more. You can always renovate or rearrange your store if your business grows and you need more floor space for inventory, for example.

Give yourself at least six months to find the right space for your business and get the store up and running. This allows you plenty of time for scouting, negotiating, finalizing your leasing agreement, and building your store before you open.

Finally, dont be afraid to negotiate and ask for more from a landlord. Some landlords will be more willing to negotiate than others, of course, but its always worth asking. Sometimes, their first offer is much higher than the landlord expects to get. Even if he or she wont bring the rental rate down, the landlord can offer other incentives such as several months free rent or a tenant allowance (a cash incentive for improvements you make to the property).

An experienced commercial real estate professional can help you find a great space (at a great price) for your business. You can find a roster of commercial members of the Ottawa Real Estate Board at OttawaRealEstate.org.