How to find the right location for your retail business
✨ Article summary: Selecting a location for your retail business is a vital part of its success — it involves more than just finding an affordable space. This blog outlines the key steps in the site selection process, including analyzing demographics, accessibility, competition, and growth potential. It's crucial to work with a skilled commercial real estate broker who can provide valuable market insights and tools to help you make an informed decision.
Choosing the right location for your retail business is one of the most crucial decisions you'll make. Whether you're opening a storefront, expanding to a new area, or relocating an existing business, the site selection process can significantly impact your success.
This guide will walk you through the key steps and considerations in commercial real estate site selection, helping you make an informed decision that aligns with your business goals.
The site selection process involves more than just finding an available space that fits your budget. It's about finding a location that will support your business operations, attract your target customers, and allow for future growth. Typically, your real estate broker will work with you to conduct market research and pull together the information you need to make an informed decision. Here are some of the types of research you and your broker will do during the site search:
Analyze the local population to ensure it matches your target market. Consider factors like age, income, education level, and lifestyle.
Evaluate how easy it is for customers and employees to reach your location. Consider parking availability, public transportation options, and proximity to major roads.
Research nearby businesses. While some competition can be good, you don't want to be oversaturated in a particular market.
Ensure the location is zoned for your type of business and complies with local regulations.
Consider not just the rent or purchase price, but also additional costs like utilities, maintenance, and potential renovations.
Think about your long-term plans. Will this location accommodate future expansion?
A skilled tenant rep broker can be invaluable in the site selection process. They have access to extensive market data and can provide insights that aren't readily available to the public.
Here are some materials you might receive from a broker during the site selection process:
Market surveys: An overview of available properties in your target area. They typically include details such as location, size, asking rent, and property features.
Demographic reports: Detailed information about the population in the area surrounding potential sites. They can include data on age distribution, income levels, education, and consumer spending habits.
Traffic studies and walk scores: For retail businesses, understanding foot and vehicle traffic patterns is crucial. Your broker may provide reports detailing traffic counts and patterns near potential locations.
Digital mapping and data tools: Many brokers now use digital tools to create interactive surveys that integrate market survey data with clickable maps.
Tour books: Key information about each property you'll be viewing, including photos, floor plans, and relevant market data.
Before you start looking at properties, clearly outline your requirements. Consider factors like square footage, layout, parking needs, and any special features your business requires.
Based on your business type and target market, identify potential areas that align with your needs. Your broker can provide valuable insights into different neighborhoods and their suitability for your business.
Your broker will provide you with market surveys of available properties in your target areas. Review these carefully, considering how each option aligns with your defined needs.
After narrowing down your options, schedule tours of the most promising locations. During these visits, pay attention to the condition of the property, surrounding businesses, and overall feel of the area.
Using the data provided by your broker and your own observations, compare the pros and cons of each location. Consider creating a scoring system to objectively evaluate each option.
Once you've identified your preferred location, work with your broker to negotiate terms. This is also the time to conduct thorough due diligence, which may include property inspections, reviewing lease terms, and confirming zoning compliance.
There's an art to site selection — a gut feeling about what works best. But a clear command of the data — and the tools to actively compare sites side-by-side — are an invaluable part of the search process. Trust your instincts, but back them up with solid research and analysis. With careful consideration and the right support, you'll find a location that meets your current needs and supports your long-term business goals.
New to CRE? Check out LeaseUp’s commercial real estate glossary for tenant rep brokerage to familiarize yourself with the most common industry terms.
