Space Size

Hello,
Looking for some thoughts. We are looking at two spots in the same plaza. One is a corner store, 1000 sq. ft. 20’ x 50’, it’s an empty shell (no walls, no ceiling, nothing). The other spot is second from the corner, but is 1200 sq. ft. 20’ x 60’ and is a vanilla box (ceiling, walls, floor). It’s about $552 per month difference. We are “newbie’s”, so we are not sure on what space we need. Thank you for your time…

Describe your concept.

And what is the base rent? Is it triple net? If so, how much are triple net charges currently? What kind of build out allowance (tenant improvement) are they offering on each?

Hopefully bodegahwy will see this. He is the man when it comes to leases.

First things first. What type of opperation are you planning? What is the exposure of each location to the public eye (how easy can it be seen from the road)? These 2 questions are only a start in knowing which place to choose. Another thing to look at are ease of access for both the customers and the trucks that are delivering you supplies.

For my operation I would find 1000 sq ft small but I could do it if necessary. Remeber that as you get busier it is nice to have space for the extra storage.

Daddio is right. Start with really figuring out what you need. Do this BEFORE you go looking at space. It will help prevent you from wasting time looking at locations that will not work for you. I also agree that 1000 feet is pretty tight even for a Delco but can be done.

The other issues mentioned are also important, visibility, access etc. As far as the math goes, you need to put the whole deal into the picture to decide what works. $6,000 per year difference in rent is not a very big deal if there is no build-out money on the table. Make yourself a spreadsheet for occupancy cost combined with buildout related costs for getting open to copmare the two locations if you determine that either would meet your needs. Run the comparison for at least a five year period.

Occupancy cost is rent plus all common area expenses. Since this seems to be an existing center, get the ACTUAL expenses from last year per foot to work with.

[size=3]Thank for the quick feedback.
One of my biggest concerns was the amount of space. The space is for a pizza and grinders carryout. The 1000sq ft spot is a better location for drive by traffic. Originally the 1000 sq ft space was 1300 sq ft. with A.I. of $12 per sq ft. But they gave 300 sq ft to the person leasing next door. My original layout plan was for 1200 sp ft. +. So now I feel the 1000 sq ft. may be too small, but I was not sure. That’s were the second location came in. Both are good locations, but I started going back and forth over if I really needed the 200 sq ft.[/size]

Don’t focus on the monthly rent at this point. Figure out what you really need for space including realistic storage and room to grow. Then get a handle on the traffic, parking, access, quality and beneficial nature of neighbor businesses and things like landlord reputation, tenant turnover, probable changes in the area over the next 10 years.

Then compare the actual costs of locations that meet your needs:

Add together base rent including increases over five years + Common area expenses for five years + buildout expense for each location. Subtract any land lord contribution like build-out allowance or rent holiday to get a solid handle on the actual price difference.

You do not have to go with the cheaper option if what you are getting for the money is worth it. On an incremental margin basis, you only need 2-3 extra sales per day to cover the rent difference you are describing. That is not to say that 2-3 sales makes it worthwhile, but it is not a large risk if you think the location is better or the facilities will help you handle the volume.

Most important: Figure out actual needs first! It sounds to me like you are not there yet.

I agree also with what they said above. I personally would rather have the corner space if possible because of the added visibility. Don’t short change your needs to do it, but if that space would be enough for what you have in your plans, the bonus for having the corner would be worth having.

I have about 5000 sq ft to work with and almost ran into the self same issue! Having soooo much space to build out left we the real possibility of wasting space and hanging myself up with design that cramped me up. I spent weeks and weeks laying out needs and wants along with the actual architectural “character” of the space. I made some choices I would change knowing what I know now . . . but I learned and avoided a lot of errors.

We laid out our needs and wants BEFORE framing the first wall. For you, know what your wants and needs are and then go find a space that meets those needs. Otherwise, the risk is that you’ll talk yourself into a space that is inadequate fro realistic needs and expansion, then be stuck with awkward operation and inefficient flow.

Hi PL:

For a DELCO we recommend no less than 1200 sq ft, 20 ft X 60 ft. Longer is better.Wider is not much help unless it is substantial and depth remains 60 Ft or more. You will need more space to store ingredients and paper products than most would expect. Storage space will help you buy larger orders and lower your costs.

When you have selected a site we will be glad to do a professional floor plan for you, no charge.

George Mills

We’re a delco operation with 1200 sq ft and it’s a tight operation. Although the kitchen area is comfortably spacious, the storage area is a tight fit. I’d imagine that when we get sales to where we want them to be it’ll be like getting around in a submarine.