How to Budget for a Retail Space in Maryland

Retail is the largest private sector employee in the U.S. In Maryland, there are upward of 68,283 retail establishments and 755,679 jobs supported by retail (National Retail Federation). For new retailers, it can be challenging to evaluate and predict start-up costs. One of your biggest initial expenses will be leasing a retail space. Here are some tips on how to budget for a retail space in Maryland.

Research Properties

To get an idea of the price range you will be looking at for your retail space, let your agent research vacant properties that fit your business needs. They will write down all retail spaces that spark your interest so that you can plan to visit them together.

Once you have a list of potential retail spaces, you can calculate the average price and use this to create a budget for your space.

Many listings will post the price per square foot. If a building is $20 per square foot and is 1,500 square feet, you are looking at about $2,500 per month for rent. It’s always a good idea to budget in advance so that you can have a few months’ rent set aside along with other business expenses.

Review Lease Terms

Often times, when leasing a retail space in Maryland, landlords will also give you the responsibility of handling costs of doing business. You want to carefully review the leasing terms of the retail space you are interested in so that you are aware of any additional costs.

The three most common charges that can be added to your base rent are:

• Common Area Maintenance (CAM): The costs that the landlord has to pay to maintain the facility itself i.e parking lot maintenance and lighting
• Property Taxes: In Maryland, landlords are required to pay Business Personal Property Taxes. This typically includes equipment, furniture, fixtures, inventory, and supplies.
• Insurance Premium: While you should have your own insurance policy to protect the property you have in your retail space, landlords have a separate insurance policy. This policy protects them in case of any damage while you’re leasing the space.

A lease that requires you to pay all three of these costs in addition to rent is referred to as a “triple net” lease. You want to be very thorough when reading through lease conditions because you don’t want to unknowingly sign a lease that requires you to pay all of these fees.

Carefully reviewing and analyzing lease terms with an agent can assist you in planning an accurate budget for your retail space.

Contact NeedSpace Commercial Today for Your Commercial Real Estate Agent!

Want to find an ideal location for your growing DMV company? At NeedSpace Commercial, we fully represent the tenant looking to find the perfect commercial space.

Born from A. J. Properties, an Anne Arundel County based commercial real estate firm, NeedSpace Commercial is designed to focus solely on Tenant Representation services, ensuring that you find your perfect business space, avoid mistakes, and negotiate the best deal.

For more information, visit our website www.needspacecommercial.com. To contact us, give us a call at (410)-551-3278!