Thursday, July 5, 2007

Location #2:

The typical reaction after having visited several sites is utter confusion and helplessness. The sites all tend to meld into one, they all look similar, they all have the same amenities, and all the landlords are considering anointing you if you pay their excessive rents. Let’s review a little about types of spaces.

Own or rent: Entire semesters at academic institutions are spent discussing all the variables. Suffice to say if you can own the real estate do so, however, if you must rent here is what you will encounter:

Class “A” Office Buildings: Generally a brand new trophy high rise. Everything is brand new, the space is raw and ready for your tenant improvements. (highest rent structures per square foot)

Class “B” Office Buildings: Older buildings, who have lost a little of their luster, yet still have strong occupancy and there is demand for their retail space.

Class “C” Office Buildings: Much older buildings, weaker tenant occupancy. Generally these properties are in a continual state of remodeling.

Shopping Malls: Space is available in food court or as a separate area.

Strip Malls: Drive up convenience.

Standalone structures: Destination location, customers are coming to you.

Once inside the restaurant the customer is shrouded into your space. The vast majority of patrons do not visit because it is located in a trophy building or not (the exception of course is if the restaurant concept is the top of the building). Location does drive traffic however, and as an entrepreneur you must consider how your targeted customers will perceive the location as an integral part of the concept.