Friday, March 5, 2010

Leasing quandary

Here's one for those of you far more savvy than I am about leasing retail space: How can a property owner have two stores approximately the same size (give or take 100 sq.ft) and yet have two different lease prices in excess of over $8 per sq ft, with the smaller store being the more expensive? The store we are in temporarily has half the usable retail space (the rest is a huge back room for storage, merchandise, etc.) and yet was quoted at $5 more psf. In addition, promo fees are higher at our current location...actually, according to the way we have seen prices tiered, where we are now should be considered the "cheap seats" in this mall--so why the hike?

I put the two proposals side by side to compare--and I am more than confused--I am left wondering why anyone would want to go permanent when there seems to be such a discrepancy in how prices are quoted. Perhaps in my naivete, I thought when the property owner gives out the price per sq. foot, the math was simple--but not so apparently. I get that the "main street" stores have more marketability, but we are on what could be called "restaurant row," and most people on this far end of the mall come to eat or go to the AMC theatre. In fact, there are only two other retail type stores on our little block-memorabilia and games. Am I missing something in the equation, or am I an easy mark? While I do not feel the second option is the better one for our type of store, it seems the one we are being forced to take. Do we move and make it our own, or do we take a chance and move somewhere and start all over?

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