January 17, 2022
Commercial vs. Retail Space: What’s the Difference?
Although they are often used interchangeably, “commercial space” and “retail space” are not entirely synonymous. Let’s analyze the differences and similarities between the two.
Commercial spaces are ideal for businesses that do not see a lot of consumer traffic. This can include offices, medical facilities, insurance providers, and real estate services. This type of space is often centrally located for employees to commute efficiently from home to office. Price per square foot and visibility is generally lower.
This type of space is perfect for a business that does receive a lot of consumer or foot traffic. Retail space is usually located near a large anchor business like a grocery or department store. According to The Balance Small Business, an anchor business is the homefront of a major retail store that helps attract consumers to smaller retailers. A great example of this is found in our recently acquired property, Greenbrier Square.
Businesses using retail space need a large number of parking spaces for customers as well as access to main roads and thoroughfares to increase customer accessibility.
Tips for renting commercial space
- Set a budget – Determine how much you want to spend, what you must have, and what would be nice to have, but that you don’t necessarily need.
- List your requirements – Tell your leasing agent your initial criteria to help them determine what spaces to show you. This will help save time and help you find your dream space sooner.
- Leverage your amenities – Consider the amenities included in your lease. Don’t be afraid to negotiate with your leasing agent to get the most for your money and the time you will invest into the establishment.
Tips for renting retail space
- Start looking early – It is helpful to begin searching for retail spaces at least six months in advance. This gives you enough time to find a space suitable for your business and finalize the necessary documents.
- Location – The success of your business is heavily dependent on where your store is located. Is it centrally located, close to major roads, and/or near other stops for customers (ie. the grocery store)?
- Curb appeal – Ask yourself if the space surrounding your storefront is invitational to consumers. The more appeal your store has from the outside, the more likely people are to come inside.
What should I rent?
If you are still in a bind about what type of space you should be renting, ask yourself some questions.
- What does your business rely on: consumers or clients?
- How important is visibility to your business? Do you need your company name to be displayed out front for customers to see?
- For your type of business, does the size of your space matter? Will consumers constantly flow in and out of your establishment or will this be the hub for your employees?
- How long do you need to lease? It is common for commercial spaces to have lease terms of at least 3-5 years.