Site Selection Secrets for Commercial Tenants

by Jeff Grandfield and Dale Willerton

Commercial LeaseThe commercial space chosen by a retail tenant can, in fact, be a deciding factor in the success or failure of the business. Here are just a few of the factors you should be evaluating when viewing available commercial space for lease and considering before signing on the dotted line:

Location Within the Location

Where is the commercial unit situated within the shopping plaza? Would you be leasing inside the plaza/mall or on the pad outside? Would you be located at the end of an abandoned corridor or adjacent to the busy food court? Is a high profile unit important to your business or is a space on the back side or second floor of a property suitable for you?


How easily can your customers access your business? Are there stairs leading to your front door? If so, elderly customers may have difficulty getting to your door. If there is an elevator, when was it last serviced? Can drivers easily turn into your business’ parking lot or do they have to cross in front of oncoming traffic or make a u-turn down the street when coming from one direction?


Can your business be seen from the street? Or, are there trees or other buildings blocking the view? Visibility by both drive-by and walk-by traffic is ideal.


This is another one of the key issues to evaluate prior to signing your first lease. In our own experience, we have seen parking to be a highly contentious issue and one of the hardest things to correct after the lease has been signed. Typically, there are only so many parking spaces assigned and, once they are taken, they are gone. Negotiate for plenty of parking spots – so that you, your staff and your customers all have a place to leave vehicles. Consider where those parking spaces are located as well; those closer to your business door can be preferable. If parking is not assigned, visit the property at several different times on different dates to ensure that there is sufficient parking for your customers and staff.


What signage is available to you? What type of signage is this? Where is it located? Would your business name be placed on a common pylon sign shared by other tenants? Would you, as a commercial tenant, be charged for any of this signage? Negotiate now for “grand opening” signage (e.g. banners and/or pull-away signs).

Neighbouring Tenants

Commercial LeaseAscertain who is doing business directly next door to you. Will this tenant be conducive or detrimental to your business? While asking the landlord/landlord’s agent about these neighbouring tenants, it can be a good idea to meet and quiz these tenants for yourself. Be friendly and polite and introduce yourself as a prospective new tenant. With representing new tenants, we at The Lease Coach frequently ask pointed questions … what you learn may very well surprise you!

Anchor Tenants

These are the major businesses/retailers which pull customer traffic to a property. Typically, they are major grocery or department stores; however, this is not always the case. Consider the stability of those anchors. How long have they remained in the property? Are they planning to remain or move? We well remember how many tenants leasing in a small shopping plaza near one of our homes were caught off-guard when the major grocery store anchor moved out. Major grocery chains frequently continue to pay rent on a vacant commercial space to avoid having a competitor moving in.

Broker – Friend or Foe?

It is not uncommon for a commercial tenant to believe that the real estate agent or broker is working for them. However, it should be noted that the listing agent’s commission is being paid by the landlord and even an outside agent may be sharing in that commission. Remember, the higher the rent often the higher the agent’s commission. Whether a landlord-paid agent can represent two masters you will have to decide for yourself. Brokers and agents do a great job, but who are they doing the job for and who is paying them to do it? Even the most altruistic agent can’t serve two masters equally. There is much, much more to site selection than meets the eye. As you can see, the best location is critical for your new business, but don’t just stop there!