Commercial Leasing · the broker's view
Retail Space Should Support the Customers Your Business Needs
The storefront with the lowest rent is not always the cheapest place to operate. Customer access, signage, parking, the uses the property allows, build-out expense and exclusivity clauses all change your economics. A landlord faces a different question: which tenant strengthens the property's income and fits beside the businesses already there?
Build My Retail Space Search Brief
The Short Answer
A retail lease is a bet on customers reaching the door. Before rent is compared, a tenant should confirm that the use is permitted, that the space can be reached and seen, and what the build-out will cost. A landlord should weigh each prospect's use, credit and effect on the other tenants. BreakThru Realty's licensed commercial agents take on both kinds of assignment, and Tyson E. Sam, the broker of record, is accountable for them.
Cheap Rent Can Be an Expensive Location
A shop's rent buys more than floor area. It buys a position: which side of the road, how drivers turn in, whether the sign can be read at speed, how close a customer can park, and who the neighbors are. Two spaces a few hundred yards apart can produce very different sales for the same business.
That is why the comparison cannot start with the rate. A lower rent in a space customers struggle to enter, or one that needs a full build-out, or one where the lease forbids part of what you sell, is not the lower cost. The reverse is also true: a prominent corner is worth its rent only if your customers are the ones passing it.
No one can promise sales at a location. What can be done is to check the facts that are checkable before the lease is signed.
Two Screens for the Same Storefront
A tenant and a landlord look at one space and ask different questions.
A tenant's trade-area and use checklist
- Who your customers are, where they live or work, and how they would reach this door
- Whether your exact use is permitted here: the city or county zoning office confirms it
- What the lease's use clause lets you sell, and what other tenants' exclusives forbid
- Sign locations, sizes and any approval the landlord or the municipality requires
- Parking near the entrance at the hours you are busiest
- Whether the neighbors bring your kind of customer or compete for the same parking
A landlord's tenant-mix screen
- Does this use add something the property lacks, or duplicate what is there?
- Would it breach an exclusive or a restricted-use clause in another lease?
- What does the business need from the building: a grease trap, extra power, exhaust, more parking?
- Who is signing: an established company, a new entity, or an individual offering a personal guaranty?
- What do the financial statements and the business plan show?
- How much improvement money and free rent does the deal require, and over what term is it earned back?
Two Spaces, One Business: Rent Is Only the First Row
A hypothetical shop of 1,800 square feet compares two spaces over a five-year lease.
| Space 1: built out for a similar use | Space 2: lower rent, bare shell | |
|---|---|---|
| Base rent per sq ft per year | $38 | $30 |
| CAM, taxes and insurance per sq ft | $12 | $9 |
| Rent and charges per year | 1,800 × $50 = $90,000 | 1,800 × $39 = $70,200 |
| Build-out the tenant pays after any allowance | $40,000 | $160,000 |
| Build-out spread over five years | $8,000 a year | $32,000 a year |
| Yearly cost with build-out | $98,000 | $102,200 |
| Signage | A panel on the roadside sign and a storefront sign | A storefront sign only |
| Access | A driveway on the main road | Entered from a side street |
| Options | One renewal option | Still to be negotiated |
Hypothetical figures with no rent increases, no interest on the build-out money and no free rent. The point is the order of the rows, not the amounts.
Verify the Permitted Use Before You Sign
A lease does not make a use legal. The local government decides that.
- Describe the use exactly. Write down what the business does, including anything that often needs separate approval: cooking, alcohol, outdoor seating, medical services, late hours.
- Ask the zoning office. The city or county confirms whether that use is permitted at the address, and whether it needs a special approval or more parking than the property has.
- Ask what the space needs. The building department can say whether a change of use brings construction, accessibility or fire requirements. A contractor or an architect prices them.
- Read the lease against the answer. The use clause should allow what you plan. Ask the landlord in writing whether any other tenant holds an exclusive that affects you.
- Tie the lease to the approvals. Discuss with an attorney whether your obligations should depend on receiving the approvals and licenses you need.
Questions Worth Asking First
- What should a retail tenant verify before signing?
- That the business may legally operate there, that customers can reach it and that the full cost is known. Confirm the permitted use with the city or county, and any licenses with the agency that issues them. Read the use clause and ask about other tenants' exclusives. Get the base rent, the charges for common-area maintenance, taxes and insurance, and last year's actual figures. Price the build-out with a contractor. Check signage rights, parking, delivery access and hours. Understand the term, the options and any personal guaranty. Then have an attorney review the lease.
- What are exclusivity clauses?
- An exclusive-use clause is a landlord's commitment not to lease other space in the property to a business that sells the same main product or service. A coffee shop might ask that no other tenant sell brewed coffee as its primary business. The value is in the wording: how the protected use is defined, which parts of the property it covers, what exceptions exist for current tenants, and what remedy the tenant has if it is breached. Exclusives also bind the landlord's future leasing, so owners grant them carefully. An attorney should draft or review the clause.
- How should landlords evaluate tenant use and credit?
- Use first. Check that it is permitted by zoning, that it does not breach another lease, and that the building can support it without work the rent will not repay. Consider what it does for the property: a use that brings regular visits helps the neighbors, while one that fills the parking lot for hours may hurt them. Then credit. Review the financial statements of whoever will sign, the operating history, and whether a personal guaranty or a larger deposit is appropriate. Apply one set of written standards to every prospect, and ask an attorney about anything that touches the lease terms.
Who Does What
- A licensed BreakThru Realty commercial agent does the day-to-day work and is your main point of contact.
- Tyson is the broker of record: the licensed Florida broker accountable for the brokerage and every agent under it. He reviews the offers, contracts and closing statements that move through the company.
- Which agent works with you, and how the brokerage will represent you, is set out in writing before any work begins.
| Broker of record | Tyson E. Sam, Founder and Broker of Record, BreakThru Realty |
|---|---|
| Florida real estate license | 3565210 |
| Also listed as | Tyson Sam, the spelling in MLS records and on the listing sites they feed |
| Brokerage | BreakThru Realty LLC, a licensed Florida real estate brokerage |
Brokerage compensation is negotiable and is agreed in writing before any work is marketed. No fee or rate on this page is a standard one.
BreakThru Realty is a real estate brokerage. It does not give legal, tax, lending, engineering or appraisal advice: an attorney, a CPA, a lender, an inspector or an appraiser answers those questions, and a broker's opinion of value is not an appraisal.
This Page Explains the Thinking. The Service Page Does the Work.
What the brokerage does for you, step by step, and how to start is on its own page: Tenant representation.
Every figure on this page is an illustration: arithmetic on assumed inputs, shown so the reasoning can be followed. None is market data, a comparable sale, an appraisal, a forecast or the result of a BreakThru Realty transaction.
Build Your Space Search Brief
I need retail space
Describe how the business will use the space, roughly how much it needs and when. A licensed BreakThru Realty commercial agent replies within one business day to turn it into a search brief: the use, the size, the total occupancy cost to plan for and the lease terms worth asking about.
The form asks for: Type of space; What the business does in the space; Preferred city or area; Approximate square feet; Budget or rent structure, if known (optional); Move timing; then your name, an email address or a phone number, and your consent to be contacted about the request. It asks for no documents.
Your request is with BreakThru Realty. A licensed commercial agent replies within one business day to go through the use, the size and the occupancy cost, and what to look at first. You are not committing to a space or to representation.
I own retail space
Tell us what you own and whether you are weighing a sale, a lease or both. A licensed BreakThru Realty commercial agent replies within one business day to go through the income, the leases and the questions a buyer or tenant will ask. No documents are needed to start.
The form asks for: I want to; Property type; City or county; Approximate building size or acreage (optional); Occupancy; Asking range, if you have one; then your name, an email address or a phone number, and your consent to be contacted about the request. It asks for no documents.
Your request is with BreakThru Realty. A licensed commercial agent replies within one business day to talk through the property, its income and your options. Nothing is marketed or signed unless you decide to go ahead.
Prefer to talk? (786) 914-1017 · sales@breakthrurealty.com
Related on BreakThru Realty
More in Commercial Leasing
- Commercial Leasing: the division page: The quoted rent is the first line of the lease. Owners and tenants each need the rest of it worked through.
- Office Space Leasing: You tour usable space and pay for rentable space. Work out the cost per usable foot before you compare addresses.
- Warehouse & Industrial Leasing: Write down how goods move through your operation, then look for the building. The worksheet a warehouse search starts from.
Every Area of Practice
The full directory · About Tyson E. Sam · Market insights · Commercial Leasing