Dating Spaces is a series of blog posts in which we share information about our search for a location with our member-owners and supporters. In our first post, we revealed our dating profile; next up, we asked our Real Estate Committee chairwoman to share her insights.
We already know your No. 1 question about the Co-op: Where is it going to be located? But the answer's anything but simple. A ton of thought, research, pavement-pounding and negotiations are going into our search, and we're working with a local realtor to help us navigate the tricky waters of South Philly real estate. To provide insight about the process, we decided to go right to the source: our realtor and resident property guru, Jacob Cooper, partner & managing director at MSC Retail, here to shed light on what's going on behind the scenes. Thanks for your insights, Jacob!
Q. What's the current climate of the commercial real estate rental market? Are properties generally renting quickly?
A. The climate is strong for commercial real estate right now. Rents are definitely rising, which typically pushes small businesses out to peripheral retail locations.
Q. What are the top three things you look for in a space for the Co-op?
A. Convenient location, functional layout, and affordable rent.
Q. Of the spaces that haven't worked for us, what are the top three reasons why they didn't work out?
A. Through this search, the Real Estate Committee has discovered that the perfect space simply doesn't exist. It's all about finding a space that satisfies as many of our requirements as possible. Rent has easily been our No. 1 issue. Other requirements include access to public transit, functional loading and trash solutions, visibility, signage and wide, usable dimensions. Plus, the space has to be delivered with upgraded utilities, HVAC, bathrooms, etc.
Q. How long does it typically take to negotiate a contract with a landlord?
A. Retail negotiations can take months. They are complex negotiations.
Q. What are the pros and cons to renting a space vs. buying?
A. With buying, you control your own destiny and potentially grow your equity in the building as it appreciates in value. However, if you don't want to tie up capital with inactive cash (like a down payment), it's better to rent. Renting also keeps relocation options on the table.
Q. What types of businesses spaces (former banks, auto body shops, retail storefronts, etc.) are most likely to work well as a co-op?
A. Typical storefronts (like many on Passyunk Avenue) won't work for us because they are too small. We are looking at properties with more width, like warehouses and other commercial properties.
Q. What if you find a space that's perfect ... except it's too big? Would the Co-op consider splitting a space with another business?
A. Absolutely.
Q. Are you a member of the Co-op?
A. Not yet, but I've promised myself I will join the day we sign a lease!
[Editor's note: We know Jason isn't the only one who's waiting to become a member till our location is secured! Our membership base is so strong already, and we can't wait to welcome even more member-owners once we have a forever home.]