A systematic approach to choosing the right retail space for your business will help you clearly see the benefits and drawbacks of a piece of commercial real estate.
How do you judge how well a particular commercial real estate space will fit your retail business needs?Sometimes you have a gut feeling. You may know intuitively that to be successful a store needs
- good visibility
- easy access
- a street with adequate traffic.
Your subjective process could be spot on, particularly if you’re an experienced businessowner. Or you can be way off base, especially if you’re new to this.
In either case, you will benefit from learning the objective process of site evaluation. This will help you make accurate judgments about potential real estate.
Making a Solid Site Evaluation
A solid site evaluation relies on three major components.
Clear objectives guide you in what you want a site evaluation to do. These include
- finding the best available commercial real estate in the market
- comparing potential locations
- explaining the source(s) of problems for an existing store
- reducing risk in a new location.
Good sources of information must be tapped. These include
- specific site features like visibility and access
- strategic plans
- customer information
- marketing/advertising support.
A systematic approach allows you to create a comprehensive site evaluation. This approach may include
- surveying customers to identify who they are and their buying behavior
- ordering a demographic report to see where your customers reside
- driving around the neighborhood(s) to study business and retail activity
- counting traffic
- rating competition
- evaluating current and potential visibility and access
- identifying barriers or other special features.
Relative Considerations vs. Absolute Facts
Any site evaluation will depend on both relative considerations and absolute facts.
For example, an absolute fact is the number of competitors surrounding a potential retail space. How well that commercial real estate space is visible compared to your competitors is a relative value.
Once you determine the absolute fact of a potential site, you can better evaluate it for its relative value. Some of the factors that influence this site evaluation include
- market knowledge
- physical characteristics of trade area
- customer knowledge
- site features
When you compile the relative values of the factors you’re using to evaluate a site, you can create a way to compare all potential locations. This is by assigning a score of site quality.
Site quality comparisons show the combined scores of individual site features and demographics into an overall quality score or rating for each site.
This is how methodical commercial real estate brokers most often evaluate real estate. However, it is most often subjective or intuitive and never specifies what site features are considered or what value is placed on each feature.
Recognize Objectives of the Evaluator
Often the perspective of the person conducting the site evaluation affects how a space is ranked.
For instance, a landlord’s agent may be under pressure to close the deal quickly. A developer may focus on long-term needs to get key tenants in the space.
As a storeowner, you may be most concerned about the bottom line during the first few years of business at a new site.
Using a systematic approach focusing on clear objectives and making decisions based on good sources of information will help take the needs of the site evaluator out of the equation.
Get information on how to create a solid site evaluation system from Commercial Real Estate Group of Tucson, email@example.com, 520-299-3400.