TIPSY TUESDAY | Commercial Real Estate – Where to start?
My name is Ellie Scott and I specialize in Retail Sales & Leasing at Avison Young in Edmonton. I’ve been in this industry since 2010 and I know the whole process of leasing space can be fairly intimidating…or at least a bit daunting. Its quite a process that requires handling legal documents, following timelines/processes, coordinating people, deposits…the list goes on and on. I want to empower you with a few tips and tricks to help you when you are starting out. Now, this may not apply to everyone. If you have leased space before, especially via Kijiji (or equivalent), it may have gone smoothly and with no complex documents to go through. That’s fair! Sometimes you land a bit of a unicorn. But the majority of properties will have/require some component of the below, and you’ll be happy you knew about them early on.
Alright, lets get into it. At this point maybe you have done some googling of “commercial space Edmonton” and google comes up with some random spacelist website or another 3rd party website…
Where to look: its honestly best to talk to a broker first, but I know sometimes you just want to take a look at what’s out there, and I understand that! So, if you don’t want to engage a broker just yet, the best place to start your search is on the websites of the different brokerage firms. There is no centralized website (ex: MLS for residential) for commercial real estate (CRE). There is a commercial section on realtor.ca, but only those brokers who are a Realtor® are able to put listings on that map. Typically, commercial brokers aren’t realtors (fun fact!). This means you literally have to search each company’s respective website. Those brokerage firms include (but not limited to): Avison Young, CB Richard Ellis, Colliers, Cushman & Wakefield, NAI Commercial, Omada Commercial, ReMax Commercial, Royal Park Realty, and more. If you see information on a sign, take down the company name and search it, or call the number on the sign. Its important to note the property address or at least its cross streets (or closest to). Spacelist is an ok search tool, but they are a 3rd party who takes information from the brokers websites and uploads it to theirs. A lot of times the information is outdated so its not usually the most accurate.
Talk to a Commercial Real Estate broker (aka advisor, associate, agent) who is has a ‘commercial’ licence from RECA (Real Estate Council of Alberta – our governing body) and are licenced to trade in real estate (if they aren’t licenced, their title will say ‘unlicensed’). More specifically, talk to someone who specializes in the type of CRE you are looking for. There are 5 asset classes in CRE – Retail, Office, Industrial, Investment, and Multi-family. Basically:
Retail = shopping/strip/power centre
Office = office buildings/walk ups/downtown towers
Industrial = manufacturing/warehouse/garage
Investment/Multi-family = buying/selling properties
Most importantly. A broker will look out for your best interest. Their job is to represent you. Find someone you connect and jive with. Someone you feel you can trust. You will work very closely with this person and communicate a lot, so you should feel like you are getting taken care of and have no hesitation towards reaching out with questions. Side note: tenants don’t pay the fee, the landlord does. So it typically has no upfront cost to you to use someone.
Some residential agents will also be licensed and able to transact in CRE, but that doesn’t mean they specialize in it. At the end of the day, find someone who can look out for your best interest, be informed on the market, and understand the asset class and the intricacies involved. As long as they know those things, you should be good to go!
Get your business plan prepared. With new businesses, both a landlord and a financial lender will want to see this. Financial terms are very important here as they want to know you’ve thought of all the costs involved in running a business. Staff, utilities, rent, all the goods! If it’s a franchise, it’s a bit different because there is a plan and proven track record behind the name. Chances are you’ll still need one to get financing. When you go talk to the bank, see what their requirements are for items they need included in the business plan.
Talk to your municipality. There are so many different requirements for each type of business. Different rules and bylaws that need to be followed, different parking requirements, fire code, all sorts of things. If you talk to someone here early on, it can help you plan out all these different aspects that you will need to include in your space. How many washrooms you need to build, if you need an emergency exit, the list goes on. There are also numerous resources online, so check your respective municipality website as well.
Budget, Location, & Timing. The trifecta of finding that perfect space. They also make up a sliding scale. Think about your budget and consider how the location might affect it. For example, in retail you might want to go into a funky shopping district, but those usually cost more money so do you think you will sell more/enough to make it work in a location like that? Or are you more destination? Will people happily drive to you to get your product/service? Will taking a less desirable location be more beneficial because you won’t need those other traffic drivers to get people in the door? What about timing, do you need a space yesterday? Its challenging to find something within a budget, in the perfect location, at exactly the right time. See the sliding scale? Think about these 3 items as they form the basis of finding your space.
Communication. Keep lines of communication with your broker open. The more open and communicative, not only will everyone be well informed, but they will also be able to adapt to any changes that arise. Legally, a broker has to keep certain information confidential, so there shouldn’t be a worry they are going to give out your personal information. That is, until a deal gets to a certain point, then specific personal information needs to be shared to the Landlord, but that’s later in the process and is still kept confidential between the respective parties
Overall timing. Leasing space can take anywhere from a couple months to years to complete. There are different variables, situations, permit issues, and all sorts of things that come up. I think for the majority of the YEG Boss Babes, it’s likely best to plan for at least 3-6 months from the day you start looking to getting the keys and taking possession.
Ask questions because if you don’t ask it, they can’t answer it. Plain and simple!
Alright YEG Boss Babes, those are some simple and yet very important tips to think of when leasing space. If you want more information, I’ve got all sorts of information I can provide to you or I can put you in touch with the appropriate person to help you out.
Thank you so much for reading – I look forward to connecting!