7 questions to ask to find commercial property for rent in Manhattan
You might have found the perfect commercial property for rent to launch your NYC-based business, but how much research have you done?
Can you afford it? Is there enough space? How long do you plan to be in that location? Sometimes our emotions get in the way of launching a business, and it's tough to take an objective view when making such a big decision. So if you're in the site selection process or have your heart set on a specific retail space, don't do anything until you've asked these seven questions!
To ensure you're making the right call for you and your business, read until the end to discover an uncomplicated way business owners can find their dream space in Manhattan.
1. Can I afford it?
When factoring costs to help you determine an appropriate space, be realistic and take a conservative approach. Remember that expenses such as utilities or rent (depending on the agreement) may increase over time.
Some of the included costs of renting a retail space may consist of:
- Security deposit
- Insurance (and insurance premium)
- Maintenance costs
- General running costs
Some costs, such as a build-out, may be covered by the property owner through a tenant improvement allowance. Depending on the location and your lease, there's typically also an expectation that the business owner covers maintenance costs. Ensure the lease agreement covers every component of the expenses above, leaving no ambiguity about who covers what costs once the dotted line is signed!
2. Which area of NY should I rent in?
Choosing a neighborhood to establish your business relies on several considerations. Some of these may include:
- Connection to public transport such as major transport hubs
- Local amenities
- The flow of foot traffic
- The community's environment (i.e., Manhattan is considered a premier location with a higher cost of living)
- Proximity to schools or colleges
- Local codes and community
- Predicted growth and local job market
For example, vacant space for an experimental business such as lifestyle dining may be better suited to the trendier and more creative Brooklyn. Think about your desired customer base and where they are likely to be located.
3. What class of building should I choose?
Buildings or properties are designated classes A, B, and C. These classifications are sometimes used to determine areas or specific locations.
Class A buildings are considered the cream of the crop in desirable locations with top-of-the-line amenities and are recently constructed. As you can imagine, B and C are slightly lower classifications, often older or in less pristine condition.
You may be better suited to either of these three property classes depending on your needs. Just because a building is a type A property doesn't necessarily mean it will be the best option for your business. For example, a relaxed cafe with an urban vibe may be better suited to a brick-and-mortar space than a class A office building! So, naturally, you will pay more for class A property than class B or C.
4. Will I require renovations or a build-out?
If your business requires extensive renovations, this might add difficulty to the lease negotiations. Be prepared to negotiate with the property owner and perhaps engage in some quid pro quo.
Sometimes property owners are more willing to cover build-out costs if there is a long-term lease knowing they will get a better return on their investment with a long-term tenant.
Keep in mind that property owners can agree to cover the costs in whole or part of the construction process through the tenant improvement allowance or a similar agreement. If you're not sure how to negotiate this aspect of your commercial lease, a tenant broker like Verada can help!
5. What's my budget for monthly incurred costs?
You'll also need to factor in the business's costs once you're up and running. One of the most significant considerations is utility costs which are also subject to market conditions and can rise over time.
Additional costs may include other operating expenses such as legal fees, consulting costs, or expenses incurred throughout the vacancy.
6. What is my ideal lease term?
This is where research comes into play. Due to the nature of commercial lease agreements and the higher risk of renting to a business, commercial lease agreements are generally lengthier than residential leases and commonly range anywhere from 3-5 years.
If you operate a smaller business and it's relatively new, do your best to bring it down to 1-2 years or work with a broker to negotiate on your behalf. You can also research leases of similar businesses in the area you plan to launch and check with actual companies.
To start planning for the future, don't forget about a renewal clause and include it in the lease agreement if required.
7. Will it have enough square footage?
If you don't know how to figure square footage, now is the time to learn! Don't forget to factor in future growth and business needs when measuring the space. Some top tips when it comes to measuring square feet for the ideal space include:
- Conduct industry research
- Plan for growth
- Include the number of staff
- Understanding the difference between rentable vs. usable square footage
- Have an idea of what goes where and how much space it will take up (i.e., kitchen, displays, dining area capacity, and more)
Understanding how to accurately calculate the square footage you need will help you find the ideal retail property for rent!
Verada can help you find the optimal commercial property for rent
Finding a suitable space to launch your retail business in Manhattan can be confusing and stressful. You want to find the perfect spot while having a million other things going on, from business development to marketing. We've mentioned seven key questions to ask throughout the process, but there are many more that aspiring business owners must ask before finding a space for their business.
If you want to take the hassle out of finding the perfect rental space for your business, then let Verada take the reins. We connect retail business owners with the ideal landlords and communities for their business needs. We understand the market and know what to look for to get the most out of your space and lease!
Reach out to a team member today to learn more about how we can help turn your business dreams into reality.
Get more insights into finding the best retail space for your business. Download a free copy of our "Guide to Choosing Your Next Retail Space."
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