The road is littered with “bad decisions” on real estate. Real estate decisions are “Permanent”. The broker, consultant and operator need to be collaborative and on the same page in all the facets of real estate selection, negotiation, and finalization. It is important for the broker and the consultant to shed as much light onto the situation so that the client can make a more informed decision.
The cost of rent always seems to be first & foremost in the client’s mind. While important, what is much more important is the potential sales at this location. Generally, “front & center” type locations do better because of the day-to-day visibility of the site. We want to carefully evaluate the competition and any nearby sales influencers so we can adequately project sales.
Size of the space today plays an important role. No doubt over the last several years downsizing is on everyone’s mind. We carefully analyze size as it compares to potential sales per square foot. We have various formulas we work with so that the client gains a keen understanding of what to expect in potential sales range, occupancy cost of rent & cam, and anticipated net operating income. This is all preplanned with the client, so surprises are minimalized, and rates of success are optimized.
The rent then becomes less of an important factor when the client can see what their opportunity for success can be. This is a tried and trued process we use. (We are not the only one). It is critical to us for you, the client, to have success. It maintains the longevity of our business. As a very rough formula your fixed rent should be 6% of your anticipated sales (be conservative). If you are pushing this to over 8% more than likely this is too high, but we have seen it work. The cam charges should be less than 1.5% which generally they are.
Whether you use us or not you need to use someone with significant experience “who is looking out for your best interests”. It is a very personalized service and requires a fair amount of time communicating back and forth so that all the individuals have clarity, and the client can have a successful project.