“Location, location, location”—that enduring house-hunting tip doesn’t apply just to the residential market. Exactly where to open (or relocate) a new store is perhaps the most crucial decision a retailer can make.
Unless you live in a tiny town, procuring the perfect space will require the know-how of a good commercial real estate agent—one who not only will show you what storefronts are on the market, but who also can negotiate a favorable deal when it comes time to sign the lease.
Reputable realtors have deep relationships with landlords, says Jay Luchs, a Los Angeles–based commercial real estate agent who’s placed numerous retailers on Rodeo Drive, among other luxury shopping rows. “I also know a lot of the sites that aren’t obvious,” he says, “because I’ve been doing this for 12 to 14 years. My specialty is showing [retailers] what’s not on the market.”
Joe Grody, a principal at Chicago-based commercial real estate firm Sierra U.S., stresses that it’s important that you and your broker “have a good synergy together—and that the broker be very candid with you. You don’t want a ‘yes’ person who will always agree with you.”
Finding an agent through positive word of mouth is, by all accounts, the way to go. But barring a personal recommendation, signs in windows from local real estate firms can indicate the top commercial players in your town. And though it’s important to give any real estate agent you’re working with the time and space to find your dream unit, don’t be afraid to end a relationship with a broker you feel isn’t meeting your needs. This happens all the time, and a good broker won’t take it personally.
Once you’re partnered with an agent, be clear about what you’re looking for while keeping an open mind. Jewelry stores can thrive in a variety of commercial settings, depending on merchandise mix, regional affluence, and even parking availability, among other factors.
Luchs says retailers should, in general, aim for “the highest-end area they can find to associate themselves with.” Furthermore, top-tier jewelry stores should “be on the best streets in the world they can be on—the streets that are known for tourists, which is very important.”
If your town is on the smaller side, Grody suggests focusing on “downtown retail sites, regional shopping malls, and certainly, when possible, freestanding buildings in heavily trafficked retail shopping areas.”
As for the insides of a commercial space, seek out “what we call a clean vanilla shell—something that’s in move-in condition,” says Luchs. If the space needs a little TLC, “ask the landlord for help in either free rent or tenant improvement dollars,” he says.
Lastly, know that shopping the real estate market years—or even months—before you’re actually ready to sign a lease might not be worth your time. Luchs says the biggest misconception retailers have is “that space will be around,” and explains, “We’ve entered into a different market. There’s not as much available that’s perfect. Wait until you have all your ducks in a row, the financing behind you, and you’re ready to pull the trigger—because you’re not going to have an easy time finding a store and saving it for a year. For the first time in five years, we’re seeing multiple offers on spaces.”