I was wondering if anyone could throw in their opinions on a decision I have to make. I have 2 locations to choose from. the first one is a space a little over 1,700 sq ft. A new building maybe 1/2 a minute away from the city’s university. It has a walk way that comes out from the school right beside the location. They are currently building a student parking garage right behind it. There will also be a martial arts studio in the same building. The rent will be $18.00 a sg. ft. The second location is maybe 3 minutes away from the University. That space is 1650 sq. ft at $12.00 a sg. ft. with an option to rent out the space next to it which is 1,500 sq. ft in 5 months when the present tenant moves out. My question to you is which would be the more ideal space to take. I will be opening a delco at first in either spot,but was just wondering everyone’s take on this? Thanks for any help or advice you can give.
If your long term plan is just to have a delco operation why pay the extra rent for the larger/better? location. 1200 sq ft should be plenty for most delco locations. If you plan to have eat in, the extra rent may be a no brainer to be right next to the high school and closer to the college. Sometimes the larger space will cost more to renovate/build out as well.
The difference is about $10,000 a year. I would go with the 2nd location you listed.
The saying is LOCATION LOCATION LOCATION…But what you need to guestimate is how much extra exposure you will get at the 1st location and will that exposure turn into enough extra sales to cover the extra expense…I am guessing you will want to do $100,000 to $150,000 extra…If your business plan calls for expansion then the 2nd space is the only one that works at the moment…
Wow, $15/sq ft.?? I’m negotiating for a new location and the landlord is asking for $25 a foot but it’s in a busy strip mall with a Supermarket, Blockbusters and Hallmark store are all key anchors. Should I be looking for another, more affordable spot??
If you are looking to run a delco (I don’t know that you are or aren’t), what they are selling to you as attractive can actually be detrimental to your business. Will drivers be able to quickly make it in and out of the parking lot with deliveries? Will they be wading through crowds of people buying movies and greeting cards? Do they pull out of the strip mall into a traffic jam? Sometimes being a little down the road away from the chaos can be best for delivery flow. It is easier to make both left and right turns onto the main road. It also reduces risk of parking lot incidents involving your employees.
I am guessing by your screen name you are in Atlanta, GA?? If so $25 a foot is pretty steep. We are just south of ATL and we are at 17.35. Even the space across the street with a wal-mart anchor is only $21 a foot…
Two areas of thought:
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On a gross margin basis you need to do about an extra $60 per day to cover the difference in ASKING rent. Being walking distance from a university would seem to be no brainer on that account. Take the first location and add a slice warmer to the front counter. The added visibility to the university students will also pay dividends for the delivery business. 1700 feet is plenty for a high volume delco with a carryout counter or even to add some front counter area with stools for the lunch business.
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Asking rent is just that: ASKING rent. In today’s environment, do not hesitate to offer less. Do your homework to find out what recent leases in the area have gone for. Get a tenant rep working on your behalf. You may find that you can get the space for quite a bit less than the asking rent and get a substantial tenant finish allowance and a rent holiday as well.