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Research whether the retail space you are considering has adequate parking. Consider both the local Government code and feedback from tenants within the center. Also consider visiting a center four to six times prior to signing a lease.

If you visit the center for the six times at different times in the day and week, it will give you a better feel for the adequacy of parking as well as other potential issues related to the center. It would be overkill to visit each center you are considering four to six times. However, this can provide invaluable intelligence for retail space before you make a serious financial commitment.

Retail space is often subject to rules established by the landlord, deed restrictions and local government restrictions. Research these issues prior to investing much time or money in a retail space option. For example, a tenant within the center may have obtained the exclusive right to sell food within the center. If you are considering opening a coffee shop which also sells pastries and sandwiches, you would either have to obtain a variance or move on to the next option.

If the approval process for the deed restrictions or local government are subjective, obtain written information regarding the restrictions and the approval process. Also consider visiting with both the retail tenant rep broker and tenants within the retail property.

Research the possibility of a condemnation proceeding. Visit with the relevant city, county or highway department officials to determine whether there are any plans to widen any of the streets contiguous to the retail center. If there are firm plans for roadway expansions, research the details thoroughly. It is difficult to develop a successful retail establishment. It would be most unfortunate to develop such an establishment and have to move after only one or two years.

This section considers the history of tenants who previously occupy the space you are considering and special issues for a new center. Once a space has made it to the "short list", research why the previous tenant left the retail space. If it was a location for a chain which filed for bankruptcy or an individual who retired and shut down the store, it is not too troubling.

However, if it is someone who operated a business similar to the one you are contemplating, and the business fails, serious due diligence is appropriate. In this event, you should attempt to speak to the proprietor who previously occupied the space. You may also want to speak to the tenant who occupied the space prior to him. Visiting with other tenants regarding the history of the space as well as the history of the center and the prosperity of their businesses can provide excellent insights.

If you are considering renting space in a proposed shopping center, serious caution is warranted. Is the concept or theme for the shopping center tested? Or is the developer trying to introduce a new team or mix of businesses for this retail property. There is clearly much higher risk that the property will not be successful if the owner is experimenting with a new concept. While you may decide it is the ideal location for your retail space, be aware that the risk of a poorly performing retail center is higher with an experimental concept.

You will certainly want to research which other tenants have committed to the shopping center. If nationally recognized retailers have committed to lease in the shopping center, you can feel comfortable that they had done meaningful due diligence and believe the concept is workable.

Separately, what is the developer's experience? Is this his first retail development or has he developed 10 or 20 properties over the last five years? If the proposed property is a retail strip center, and the fundamental characteristics of the center are sound, leasing from an inexperienced developer is probably a reasonable risk. Also consider obtaining the work history or résumé of the developer. Does his recent history indicate a pattern of successes or failures?

Desirable characteristics for a retail strip center include a hard corner location, space which is parallel to at least one of the streets, and a relatively modest size (perhaps 10,000 or 20,000 ft.˛). Ideally, it would also have an anchor tenant, perhaps a nationally recognized convenience store. However, many strip centers do not have an anchor tenant.

Renting space from an inexperienced developer building an experimental concept is probably taking an unnecessary and inappropriate level of risk.

Next review whether the retail space you are considering is complementary to nearby retail establishments. For example, it would not be appropriate to put a liquor store adjacent to a school for troubled children. However, a dry cleaners, nail salon, office supply store and dollar store might all fit well in their neighborhood shopping center anchored by a major grocery chain.

Grocery stores, drugstores and gas stations tend to be complementary. In some cases, they are all provided by one retailer. For example, many of the Sam's Club or super Wal-Mart's have groceries, a drugstore and sell gasoline. In addition, there has been a growing trend for grocery stores to sell gasoline as a loss leader. Their objective is not to make money selling gasoline. Their objective is to increase the number of trips customers make to the store to buy groceries.

In some cases, "category killers" cluster in a power center. (A category killer is a retailer who stocks every conceivable item relative to a category. Office Depot is a category killer for office supplies. Petco is a category killer for pet supplies.) Having four to six category killers in one cluster is referred to as a power center.

The stores are not linked in a physical sense, other than being part of the same planned development. In other words, they were likely developed at the same time on one large tract of land, but there is no enclosed pathway between the stores. Other examples of category killers are Home Depot, Circuit City, Best Buy, Linens N Things and Bed Bath and Beyond.

Another example of complementary use retail uses would be to put a beauty products store, hair salon, tanning salon, nail salon and spa contiguous with each other in the same retail center. Customers interested in one of these businesses may well be interested in at least one of the others.

Complementary uses can be a meaningful enhancement of a location. However, uses which are clearly inconsistent with your proposed location may be a deal killer.

When retail space meets the minimally acceptable standard for the previously discussed criteria, it is time to review the costs to prepare the retail space for your business. In broad terms, the costs include signage and the cost of renovating or redoing the improvements within your space.

At this point, you need to know the landlord's policy regarding tenant improvements. (Tenant improvements are worked performed to make space suitable for a business. It can include adding restrooms, demolishing and adding walls, floor coverings, window coverings, signage and virtually anything else related to physically preparing the retail space for your business.

The landlord is usually willing to fund tenant improvement expenditures provided he is confident the tenant has the financial capacity to pay rent for the term of the lease. If you're representing a national retailer with a strong balance sheet, landlords will practically spend as much money as you request on tenant improvements. Of course, the cost of the tenant improvements will be built into the rental rate.

If you're a start-up business with no track record and little capital, landlords will be cautious about expenditures for tenant improvements. They will likely want you to fund tenant improvements for your space. The benefit is your rental rate will be lower. However, you'll have to include the cost of preparing your space for occupancy in your initial capitalization.

Other issues related to tenant improvements include defining the work to be done, and who has financial responsibility for performing the work. If you're a national retailer, you might provide a landlord with a detailed set of plans for your space. It is then up to him to cost effectively provide the buildout you are requiring. If you're a smaller retailer, the landlord may provide a tenant improvement allowance, and require you to interface with contractors to have the work performed.

The cost of tenant improvements occasionally exceeds $100 per square foot for second-generation retail. It is generally much lower. Even if the landlord is willing to provide substantial funds for tenant improvements, be cautious about the scope of work for tenant improvements. The landlord's expenditure for tenant improvements is essentially a loan which will be repaid with your rent during the term of the lease.

If the space requires tenant improvements which require obtaining a building permit from the city, review whether you'll have to replace the restroom because of ADA. (ADA is the Americans with Disabilities Act). In most cases, changes to provide ADA compliance are not necessary if you not require a building permit. However, a consequence of obtaining a building permit is typically that the space must be revised to completely comply with ADA. Replacing the bathroom so it is ADA compliant can be expensive.