Let’s face it, we have all been in a situation while viewing a retail space with a leasing prospect where they blindside us with a question that we can’t answer. I’ve been a commercial real estate Advisor in Baton Rouge for just under three years and have shown quite a few retail spaces, and more than once I’ve been jammed up by a question I couldn’t answer. The good news is 95% of the questions a potential tenant will ask are going to be the same every time! The key is to know what those questions or objections are going to be in advance and have answers ready when you need them.
So what are some answers that every agent or broker should know about the retail space they are showing their prospects?
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10 Retail Space Questions You Should be Prepared to Answer
- What is the size of the space? – This is one of the most common questions. How credible will you seem if you can’t even tell your prospect how big the space you are looking at is?
- How much is the base rent? – Sure, you sent your prospect an email with all of the pricing information but if you are looking at multiple properties it’s easy to get the numbers mixed up.
- How much is CAM? – The dreaded CAM charges! These charges are constantly changing. The CAM fees from a suite leased a year ago could have changed drastically since that time. It’s always best to double check the CAM fees before quoting a total monthly price for the unit.
- What does CAM cover and why am I responsible for that? – Depending on who your prospect is, they may have never even heard of the term “CAM” before. If they ask you “Who is this guy Cam you keep talking about?”, you should at least be able to give them a few bullet points on what Common Area Maintenance is and what it covers in that particular retail space. Generally, CAM covers property taxes, insurance, parking lot maintenance, landscaping and security lighting. Some centers even have the water included in the CAM. People love that “free” water! Be sure to explain to potential tenants that these fees are costs associated with operating their business.
- What type of term length is the landlord looking for? – Depending on the landlord of the retail center or the building you are showing, the minimum term can vary greatly. The owner of a lower end center may entertain something as short as a 6-month lease, where as a new center in a great location may require a 10-year lease if they are giving the tenant an improvement allowance.
- Will the landlord fix this? – NO… No he will not. This is a pretty easy one to remember. I typically find that a landlord would prefer to give the potential tenant some free rent to offset the cost of painting or fixing the space in question.
- Who was the last tenant? – This isn’t one that always comes up, but some prospects want to know who the last tenant was and, more importantly, why they left. Did they leave because the location was bad or did they leave because there wasn’t enough room for them to expand?
- How many parking spaces do we get? Are there enough with all of these other tenants? – Some tenants require a tremendous amount of parking and some only 2 or 3 designated spaces. It’s always good to know the parking ratio and make sure there isn’t a parking conflict with the other tenants in the center.
- What type of tenant will the landlord allow? – It’s going to be pretty difficult to convince the property owner to approve a tattoo shop use right next door to a high-end fashion retail use. Try not to show your prospects a space that they may fall in love with just to have to tell them the next day that the owner of the center doesn’t want anything to do with their use.
- How much is the deposit? – I find that most landlords like to get an amount equal to the first month’s rent for a security deposit but every owner is different. It usually depends on the situation and who the tenant is. I have even seen a landlord waive the security deposit completely!
Be Prepared to Show Your Retail Space
Coming across as prepared and competent can be the difference between closing a deal and losing a great prospect. Fortunately, we now have access to so much technology which leaves us no reasons for excuses. I like to email myself the flyer before I leave the office to go show a property, that way I have access to all the information I could need right there in my pocket! When everybody does their homework nobody looks the fool! If you are looking for answers related to a retail space, reach out to me at email@example.com.
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About Us – The team at SVN/Graham, Langlois and Legendre has over 99-years of combined experiencing helping clients across the Baton Rouge area get the most value out of their CRE investment. Contact one of them today with any questions you may have and start seeing the returns in a market that will make sure to give today, tomorrow and for the extended future. To reach us, you can call us at 225.367.1515 or you can send us a message on our website. You can also follow us on Twitter at @svngll or on Facebook.