How to find an ideal retail location
If you’re a retailer expanding into a market or expanding your footprint, location is a key consideration—perhaps even the most important one.
There’s an adage in real estate that it’s all about location, location, location.
And retail real estate is no exception.
So what are the key things a retailer has to do in finding that ‘killer’ location that sets the foundation for success?
Jeff Robson, owner and broker of JR Mercantile Real Estate Advisors Inc. in Calgary, says the first thing retailers have to consider is the key and all-important question—Who is their customer?
That will help guide to geographically where they should be.
Some things to think about if the retailer is looking for a streetfront location. A corner location is ideal because they’re seen by more people. In Canada, it’s important to be on the sunny side of the street. Take a look at neighbouring tenants. Will they draw similar or complementary customers to their business? Also, they need to be conscious of the community or surrounding area. Is it a growing or a dying neighbourhood?
Here are five important steps a retailer should consider when looking for a ‘killer’ location.
1-Tour locations with a broker.
See if it has the right access. Check the parking. Visit the area. Get a feel, in person, of what that location is like.
You’re going to be looking for visibility. How visible is it to the street or the walkway if it’s a streetfront location? You’re going to look at how well-maintained the property is in terms of the sidewalk and surrounding area to see if it’s a landlord that takes care of their buildings.
“What’s the parking like? Are your customers going to be able to get to you? Who is next to you? Are they tenants who are going to help drive traffic or are they the type of tenant that’s going to be detrimental to your business?”
2-Pick your top locations and tour them individually
Sit outside your top locations and watch the traffic flow.
Go there different times of the day and different days.
3-Consult top-down data from different sources
Statistics Canada and some research companies have data that can be helpful to identify if the area or neighbourhood you are interested in is the right fit. Data can range from retail sales to income levels to the housing market.
With our clients we review a whole broad spectrum of demographic. Also what are some of the legislative changes that might affect their location—like an area structure plan or is something going to be re-zoned next to you or across from you that could be good or bad for your business.
4-Do a geo-targeted survey with a provider like POTLOC.
Robson says you can dig behind what’s the strength or the weakness of a location looking at a whole set of demographics, profiles and incomes to see if there is a pattern.
It’s one measure of many. Sometimes it comes down to all these things but then if your gut tells you no, then that’s the best thing to go with sometimes.
5-Sign the lease … but be careful
When the location is picked and decided, it’s time to sign the lease. Retailers should make sure they carefully read the terms. It also doesn’t hurt to do background checks on the building and the landlord.
Speak to the tenants who are already in the building if it’s more than one tenant. Ask the tenant how they like their landlord. What don’t you like about your landlord? Those types of questions. Hopefully you’re working with a seasoned agent that can give a review of the lease to give you some high-level pointers but also have a lawyer, who specializes in commercial real estate, review your lease. It could be the best money you ever spent.
By Mario Toneguzzi