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Leasing agent's business earnings model...?

I'm looking to expand my family retail jewelry store into a second location. Rents are outrageous. The leasing agent rattled off some statistic about how a jewelry store earns $300 per foot on average. They are about three times too high and completely unrealistic.

Where do these statistics come from?

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  • 1 decade ago
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    There are retail models which are used by lenders and commercial agents use to justify loans and rentals. I am sure that the big retail jewelers can do 300 bucks per sq ft worth of business. In a mall where there is significant foot traffic and lots of money for advertising.

    I am equally sure that those numbers are from chain stores in malls and that those numbers do not reflect the current economic realities

    I once talked to a food vendor that I knew in a food court in a high traffic mall. His rent was about 5 x what a non mall would have charged him. I suggested that he tell the mall management that business was "OK" and that he wasnt all that sure he would be renewing his lease. They lowered the rent at renewal to keep him there. I still get free food from him.

    .

    The real question is do you think that the rent is realistic for you. If it isn't then dont be afraid to low ball the lease. The most they can say is NO. If they do then simply look elsewhere. Most retail landlords are hurting and you may just find that they will be creative with their leasing agreements to have the space filled. Play hardball. They need to lease you the space more than you need to rent it.

    And if you profit from my advice please feel free to let me know, my wife would really like a nice Christmas present!

    Source(s): I am a fellow small business owner and a non-commercial landlord.
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