Hill Bros. Browse our properties below for availability. Please contact us for further information. This 22, square foot strip mall features a mix of professional, financial, retail and restaurant services. It is located at the intersection of Prospect St.
Requesting to have a clause written in preventing your landlord from Strip mall lease to the competition leas be a smart idea. Discount retailers, as the name implies, sell merchandise at a discount either through more efficient means of distribution or products that may be similar to full price products but are of inferior quality. This column is no substitute for legal, tax or financial advice, which can be furnished Stri; by a qualified professional licensed in your state. By James Kimmons. Success is Easy.
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Believe it ,all not, many retail leases don't require the landlord to return your security deposit when the lease expires. The form provides for minimum rent, percentage rent, and prorata payment of operating costs for the center, subject to pro-tenant limitations. Success is Easy Buy From. The document is relatively pro-tenant in tone, and many of its provisions are short and sweet which tends to favor the tenant. Don't have leasd account? The landlord is obligated to try to acquire a contiguous adjacent parcel, and the ground lease will terminate Strip mall lease the landlord fails to do so within six months after the execution of the lease. If your business is just getting started, it may be difficult to obtain larger space, says Kingaard. The landlord makes a contribution to the cost of construction, and anything in excess of the landlord's contribution must be paid Strip mall lease by the tenant. The tenant pays no percentage rent, but is responsible for its prorata share of taxes and expenses for the complex. Start Your Own Business. This percentage rent form is for a Florida shopping center tenant with considerable leverage, and the lease has pro-tenant modifications sprinkled throughout. Things sometimes get lost in the mail, though, and you don't want to lose your space because of a postal service mishap.
Retail leasing and strip mall leasing encompasses a variety of configurations, depending on the zoning, shopping demand of the area and physical constraints of the property.
- Like residential areas, the rent of a retail space depends on the size of an area, its style, location and the length of the lease.
- This Lease Addendum is a pro-tenant list of specific items that are excluded from the landlord drafted definition of operating expenses.
- So you've got a wonderful idea for a retail business and have found the perfect space in your local shopping mall or "Miracle Mile.
Location is a make or break factor, particularly in retail. The location of your store can significantly impact your visibility and foot traffic, so you want to take your time finding and securing the best one. For starters, commercial lease terms tend to be longer than home rental terms, averaging at about 3 years. The structures of responsibility in commercial leases are also more flexible. Depending on the type of lease you agree to, your rental suition could range from paying a smaller base rent but be responsible for costs like utilities, maintenance, and taxes to paying a premium to have the landlord take care of all financial responsibilities.
For more clarity, Clint Gharib offered insight on the four main ways that commercial leases are structured in Forbes :. All this to say, when it comes to a retail lease, there are a lot of little things that can be negotiated and requested to make the lease turn out in your favor.
And remember, some of the smaller details can either make up for a higher base rent than you wanted, or you can use them as tools to lower that base rent. The very first thing you need to do before even looking at locations is to settle on your exact budget, what things you absolutely must have, and what things would just be nice to have.
Those nice-to-haves will end up being your negotiating chips. Agents, after all, are experts. Find one here. To negotiate from a place of strength, you should do it on more than one location at the same time.
This will give you the ability to walk away from at least one of the negotiations, putting you in a better position. Landlords ask for a rent up front that is the maximum amount of rent they think a tenant might agree to pay. Space measurements can get out of date easily, as each commercial tenant tends to change the space to suit their needs.
The exact square footage is important because commercial rent is paid by the square foot. Your goal of base rent negotiations is to achieve the minimum lease length with the maximum benefits. A method that may help you here is to negotiate future renewal options. As a note: you should negotiate on the renewal options anyway. Getting future rent increases capped is always a good idea. Again, brand new retail businesses may find themselves better off accepting the higher price of a short-term lease the first time around, while focusing on getting favorable termination and subleasing clauses for peace of mind.
Free rent is a popular promotion for landlords and it can also be a great compromise on a rent discount. A landlord may not wish to lower base rent because it could lower the value future tenants are willing to pay, but they may still be willing to give you a discount via free rent periods. On a 3 year lease, a single free rent period per year will result in a total of an 8. Tip: When negotiating free rent periods, ensure that all other expenses maintenance, utilities, etc. The most common example is being late on rent payments.
Without a cure period, you may be subject to paying fines or legal action for something as simple as forgetting to pay rent for a single day. A cure period should be one of your non-negotiables, especially because most-all landlords are happy to agree to one. A sublease clause is good to have added in either in addition to or instead of lower termination fees. Should you need to move to another space, subleasing will allow you to recoup lost rent. A co-tenancy clause is a clause which allows you to break your lease should a major tenant that drives business to you in the same multi-tenant building move.
This especially comes into play for small retailers operating in a strip mall with a popular retail behemoth like Target or Walmart. These big box stores may provide the initial attraction to your location and ultimately drive a lot of traffic through your doors. Requesting to have a clause written in preventing your landlord from renting to the competition can be a smart idea.
See if you can turn that responsibility over to the landlord. And failing that, you can get caps set on your per year out-of-pocket on the system. It may be a simple as hanging a few things or it may be more intensive. Others, however, may prefer you redo the space yourself, but be willing to provide free rent during the fixturization period.
For intensive changes, you should seek for up to days of free rent to allow for permits to be obtained and then for construction to occur.
As mentioned earlier, it may be hard to haggle with a corporate landlord over certain things like the base rent and lease structure. But corporate landlords will offer other things that you may be able to get for free, such as free employee parking or wi-fi.
VendHQ Blog. Triple Net Leases: tenant responsible for all costs of the building, except the landlord is generally responsible for structural repairs. Web More Posts You will receive a confirmation email shortly.
The "condemnation" clause in many leases prohibits you from suing anyone for damages if your leased premises are seized for a public purpose--all you can do is terminate the lease and move elsewhere. The tenant's anchor status give it the leverage to negotiate an extremely pro-tenant lease. Heating and air conditioning. Be sure to show your landlord photos or drawings of what your outside signage will look like, and get the landlord's approval--before you sign the lease--as landlords are sometimes very fussy about how their shopping centers look to the outside world. If you have had a bricks-and-mortar store in the past and a proven high amount of sales per square foot, you are more likely to be able to obtain a larger, more prestigious space. LA Comprehensive Pro-Landlord Regional Shopping Center Lease This pro-landlord lease is designed for a regional shopping center tenant taking shop space in the mall. Make sure that information in included in the lease.
Strip mall lease. QUICK LINKS
Like residential areas, the rent of a retail space depends on the size of an area, its style, location and the length of the lease.
There are also major differences between these spaces. Sometimes your rent is a percentage of your monthly sales, and sometimes it is simply a fixed monthly fee. The city and state in which your business operates will have the greatest bearing on how expensive rent will be at your retail space.
In St. Find the average for your city by using the link in Resources. Also, the location within your town will determine your rent cost. Some governments offer you a discount on rent as an incentive to set up shop in underdeveloped areas, says the Small Business Administration. When you choose the specific location of your store, there are many options to consider.
Do you want to set up shop in an indoor mall, strip mall, standalone building, kiosk or cart? According to Jan Kingaard in an "Entrepreneur" article, rent for spaces in shopping centers is usually about four times the price of rent for a kiosk or cart. The quality of the space itself should also determine how much it costs.
A retail area in a new strip mall is likely to be significantly more expensive than an area in an older or run-down building. While landlords will never guarantee that your parking spaces won't be used occasionally by other tenants and their customers, you should at least have a few spaces for yourself and your employees, located not too far away from the leased premises.
The U. Supreme Court handed down a decision recently giving municipal governments broad powers to seize private property whenever they deem it to be in the public interest, as long as they pay fair value to the property owners. The "condemnation" clause in many leases prohibits you from suing anyone for damages if your leased premises are seized for a public purpose--all you can do is terminate the lease and move elsewhere.
The landlord understandably doesn't want you suing them or glomming onto their condemnation award, for something that, after all, was outside the landlord's control. But you should insist on the right to seek reimbursement from the government directly for relocation expenses, loss of business and any other damages if your space is seized by the local government.
Tenant relocation. Surprisingly, many leases contain a clause allowing the landlord to relocate your business to another part of their shopping center at any time with just 30 to 90 days' notice.
That's okay if it's being done for a good reason--such as construction being done to expand the shopping center. It's not okay, though, if the landlord has found a better-paying tenant for your space and wants to relocate you to retail Siberia. Insist that relocation occur only temporarily for not more than days and for good reason such as construction , and that any substitute space be "reasonably comparable" to your original space, with a rent adjustment if it's a smaller space.
Also, make the landlord pay for signs at all mall entrances directing customers to your temporary location. Security deposit. Believe it or not, many retail leases don't require the landlord to return your security deposit when the lease expires.
Make sure that information in included in the lease. Also, insist on including a provision forcing anyone who buys the shopping center from your landlord to honor all the landlord's obligations to preserve and return your security deposit.
Personal guaranty. Last but not least, if you're using a corporation or limited liability company LLC for your business, ask that any personal guaranty of the lease be limited to one year's base rent, plus any arrearages. If you're in a strong bargaining position, ask for a "good guy" guaranty, in which your personal liability for lease defaults is limited to rent that accrues up to the day you quit the premises.
This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. Copyright Clifford R. Distributed by Creators Syndicate Inc. Starting a Business. Before you sign on the dotted line, find out just what you need to watch out for--and have included--in your retail location lease.
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Hill Brothers Ltd. | Commercial Leasing
Shopping Centers and Retail Real Estate come in different types and configurations depending on their purpose. The size and configuration are dependent on the purpose and the Trade Area that they serve. A Trade Area is the geographic area from which a Shopping Center or Single-Tenant Net-Lease retail real estate property attains its customers, clients and shoppers.
Additionally, many of the employees who work at the property also live in this area. The limits that define a trade area will be distance or in urban environments: travel time ; natural barriers such as mountains, rivers and parks; man-made barriers such as railroad tracks, highways that may bisect a city and cemeteries.
In certain inner-city neighborhoods the trade area also might be defined by one gang territory from another rival gang territory.
In rural or far suburban locations the trade area could triple or quadruple in size to encompass the amount of population to support the required sales necessary to make a profit.
Additionally, demographics, or the number and incomes of people in the trade area will determine the type of shopping center that serves the particular population.
On the other hand; drug stores, supermarkets and McDonalds are ubiquitous throughout the world in one form or another. Shopping centers can be Malls enclosed or open air which tend to be larger size more square footage of leaseable area and total land area surrounded by parking. Malls are typically enclosed, with a roof over a climate-controlled corridor between two facing rows of stores.
Some malls are open to the weather and without a roof over the connecting corridor. Malls are usually one or two levels but can be multiple levels in urban settings. Malls eventually got bigger with more department stores to attract people from a wider radius farther distance.
Pioneering Mall Developer A. Mall shapes have now morphed into every imaginable configuration to cram as much Gross Leaseable Area GLA onto a project site. Debartolo, Jr. Debartolo, Sr. Debartolo was revolutionary with adding a hotel as an anchor in the s.
Note the organic growth of new corridors as department stores were added. Then as some of those department stores disappeared their footprints transition into clusters of junior anchor tenants, restaurants and entertainment concepts.
Malls are now a world-wide phenomenon, much to the chagrin of Victor Gruen. Strip Centers Open Air Center or Plaza : A strip center is an attached row of stores or service establishments owned or managed as a retail project, with on-site parking usually located in front of the stores. The shopping center is usually but not always defined by uniform facades or sign bands which may function as a canopy to cover the walkway directly in front of tenant storefront entrances.
Strip centers are most commonly one level unless located in a densely populated area with high land prices putting a premium on land usage. Strip Center Straight Line. Net-Lease Single-Tenant Retail: A stand alone retail store, restaurant or service establishment which can be situated on its own or as a separate parcel within a larger retail development such as an out parcel or an anchor tenant store on a separate pad.
A further distinction of the sub-types of Retailers and the Shopping Centers they choose to locate within is sometimes blurred is the concept of Price Point. Luxury retail is delineated not only by higher price points but also better quality, exclusivity and the status the products are implied to confer on the purchaser.
Discount retailers, as the name implies, sell merchandise at a discount either through more efficient means of distribution or products that may be similar to full price products but are of inferior quality. Off-Price retailers doffer inconsistent assortment of brand name and fashion-oriented soft goods at low prices.
With retail continually evolving and changing the traditional lines of Full-Price, Discount and Off-Price are blurring. These categories and characteristics :. A Convenience Center provides for the sale of personal services and convenience goods similar to those of a neighborhood center. It contains two 2 to twenty 20 stores, with a total gross leasable area of up to 30, square feet.
MichaelJFlight com — Convenience Center. Recently, Dollar Stores and smaller Health Clubs are also serving as secondary anchor tenants in neighborhood shopping centers. Neighborhood Shopping Centers frequently have out parcels or pads in front of the parking field which are typically tenanted by fast food, drug store or even supermarket related gas station.
A Community Center typically offers a range of apparel and other soft goods. It has a larger trade area than Convenience and Neighborhood shopping centers. Community Centers are typically anchored by discount department stores i.
Walmart, Target in addition to supermarkets, drugstores, Off-Price tenants i. Tenants located in Power Centers are highly promotional using heavy brand advertising and mass marketing to draw traffic and consumers to their stores. Merritt has also been credited with the first Lifestyle Center see below. More recently, with retailer bankruptcies and entire product categories susceptible to online retail channels Power Centers have lost some of their investment quality attractractivenes.
The most recent category of shopping center is the Lifestyle Center, which is a shopping center sometimes combined with residential and offices that will have higher end mall Specialty Retailer type tenants in an open to the elements format.
Lifestyle Centers are sometimes described as a Mall without the Department stores. A Lifestyle Center usually combines the features and amenities of a Mall including a pedestrian orientation with stores facing inward and parking surrounding the development. Many Lifestyle Centers have a streetscape design with pull-in storefront parking and parking decks.
Lifestyle Centers use less land, so they could be developed closer to existing populations and the stores typically have higher sales volumes found in better malls. They are a hybrid of a Mall and a Strip center. Small shop tenants have higher concentrations of fashion, apparel, shoes, accessories and jewelry.
The typical layout of a Regional Mall is the stores facing inward with parking lots and parking decks surrounding the center. Less dominant Regional Malls with weak anchor tenants may soon be extinct. Some of these malls will make great redevelopment opportunities because of the large parcel of land located near major intersections. Many Malls will be converted to Mixed Use as they remain excellent locations for residential and hotel developments.
Some parts of these malls may end up as light industrial distribution centers to get e-commerce deliveries closer to consumers. My company, Concordia Realty ,has redeveloped 3 regional malls all of which stayed retail but ended up as strip centers. At South Hills Mall in Poughkeepsie, NY the anchor tenants had relocated to a competing mall so we redeveloped the property into a hybrid power center with a mall component in the late s.
This result was not as successful as our next redevelopments which included Southgate Mall in Milwaukee, WI. At Southgate, we strategically developed a movie theater in the rear parking lot, relocated Walgreens out of the mall to a front pad while emptying the mall over 2. Southgate is currently a thriving Community Center and was the spur for other community redevelopment in the area.
Similar to a regional center, but because of its larger size, a Super-regional Center has more anchors, a deeper selection of merchandise, and draws from a larger population base.
In certain Superregional Centers like Mall of America or Woodfield Mall the center draws from many states in the region and are some of the top tourist destinations in that particular state or country. As with regional centers, the typical configuration is as an enclosed mall, frequently with multilevels. Super-Regional Shopping Centers typically contain 3 or more full-line department stores and may have one or more specialty junior department stores.
Festival Centers aka Theme Centers are typically urban, adaptive reuse projects that because of their location will cater to tourists and nearby, densely populated office buildings. Rouse and the Rouse Company. Festival Centers were a successful downtown renewal strategy, usually located on or near a water feature such as river, lake or ocean. Initially they featured a mix of local tenants but have now added national chain stores for additional drawing power.
The first Factory Outlet Centers were built as a strip of stores with visibility to a major highway. As these centers are now built all over the world they can be configured as enclosed malls or laid out similar to Lifestyle Centers in a cluster of stores with connecting corridors. They were originally located in rural and tourist areas because of prohibitions from department stores and specialty retailers about direct competition with their Full-Price merchandise. Many Brand-Name manufacturers actually had distribution agreements with retailers in regards to Minimum Advertised Pricing and Resale Price Maintenance agreements.
Factory Outlet Centers are also known for shorter leases with many tenants and developers agreeing to 1 year lease terms.
Retailers, Restaurants, Medical Providers and Financial Service tenants all are interested in the high visibility and flexibility that can be obtained with a stand alone building. Smart shopping centers developers and investors are spinning off out parcels or subdividing off anchor tenant parcels to recapitalize or improve investment returns by arbitraging the higher cap rates paid for Net-Lease Single-Tenant properties. Single-tenant retail properties can be stand alone or actually located within a shopping center on an out-parcel or out-lot in the front parking lot of the shopping center.
A Single-Tenant Net-Lease property investment has many of the characteristics of buying a bond. Net-Leased Single-Tenant Retail properties have become highly sought after by individual investors, REITs, insurance companies, pension funds and other institutional investors.
Street front retail typically does not have parking but can be one or more stores extending as much as a city block. Get Free Email Updates! Signup now and receive an email once I publish new content.
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