Whether you’re a retailer searching for the perfect storefront or an investor looking to purchase a new retail property, selecting the right retail space to rent or buy can be tricky.
How can you know whether you’re choosing the right location to appeal to your target demographic? Which factors are most important to consider when selecting a retail space? And how can you weigh the risks and rewards of each available space?
Perhaps you’ve been scouring Cleveland retail property listings, but the questions and concerns are only continuing to grow. Before you look at another property listing, read through this list of 7 important things to consider when selecting a retail space.
Ask any commercial real estate expert, and they’ll tell you that local vehicle and pedestrian traffic is one of the best indicators of whether or not a retail business will succeed. The more people who pass by your property, the more opportunities you will have to attract and convert new customers.
2. Target Demographic
Of course, having a lot of foot traffic near your retail location is a good thing…but the payout will be much smaller if those people don’t fall within your target demographic.
Before leasing retail space, spend some time getting to know the area. Does your ideal demographic live, work or play there?
An upscale clothing and jewelry boutique located in an affluent neighborhood will almost certainly see more sales than one in a low-income area. Likewise, a retail store catering to families with young children won’t have as much success in an area with a high volume of young professionals or retirees.
So your retail space is located in close proximity to your target demographic, and it receives a high volume of vehicle and pedestrian traffic…but how easy or difficult is it for those potential customers to actually access your store?
Is the property located near a corner or traffic light? Or is it in the middle of a block, requiring vehicles or make a u-turn? Are there multiple entry points onto the property? Perhaps most importantly, is there ample parking for all of your customers? Nothing scares away potential shoppers more than a cramped, crowded, difficult-to-access parking lot!
4. Size, Shape & Layout
How much space do you actually need? Choosing a retail space that is too large will equate to throwing your money away on rent or mortgage, while a too-small space will limit your opportunities for growth and expansion.
The shape and layout of your space will impact your interior design possibilities, as well as how inviting your store is to customers. In general, retail spaces that are more wide than deep tend to have higher sales, as buyers are able to quickly scan the store and view product offerings.
Think you’ve found the perfect retail space? Before you commit, take note of who your new neighbors will be. Do you think these businesses will complement your own, possibly even driving new customers your way? Or is there the potential that they could actually hurt your business?
Many shoppers opt to run multiple errands at once, and would prefer to cross off multiple to-do items in a single trip. When the businesses in a retail plaza complement one another by offering diverse services that appeal to shared customers, everyone benefits.
One of the most essential questions to ask before leasing or buying retail space is “how much can you afford to pay?” It’s important to not only consider the upfront costs, but also ongoing expenses like rent or mortgage, taxes, utilities and insurance.
Add up all of these costs, and compare them to your projected yearly sales. How much of your annual income will go towards owning or renting this property? Is that a percentage you feel comfortable with?
7. Needs vs. Wants
It’s all too easy to get caught up in your own idea of the “dream retail space.” For many business owners, minor aesthetic details can start to feel more important than the factors that truly matter, like the size of the space, foot traffic or even monthly costs.
Make a list of your genuine “must haves,” and be prepared to separate these from your “wants.” Sure, tall ceilings and wide windows are nice to have…but don’t make the mistake of thinking they’re more important than the right location or price point.
Cushman & Wakefield | CRESCO Real Estate brokers are veterans of Greater Cleveland’s retail real estate market. Before you buy or lease a retail space, contact our team of experts for help making the smartest decision for your business.
To learn more about how CRESCO, Greater Cleveland’s leading commercial real estate company, can help you with your property needs, contact us at 216.520.1200, or fill out the form below. A CRESCO professional will contact you shortly.