Three issues to consider when leasing retail space on a short term deal in SoHo, NYC.

A lot of landlords in the SoHo today are working on shorterm deals, short term deals being in one to five years. Three issues of come up all the time that need to be considered:



The first thing you need to consider is downtime and out of pocket costs to not only do this deal. But, how much is it going to cost you for your next deal. So what's the downtime going to be to really relax the space. How much is it going to cost you, in soft costs, out of pocket costs for the next deal. And that can really help determine if the deal you're working on today really is the right deal for you.



The second thing you have to consider is what is the fair market value of the space going to be at the end of your term. Nobody has a crystal ball but can look at the number of comparable spaces are available today, what is what's in the deal velocity in the time period that you're considering to do deal. So if you're looking to do a three year lease, what's the deal velocity for that same for competitive spaces in the last three years. Additionally, you also want to take a look at what are the expiring leases all the competing spaces in the market.



Third thing is, this comes up a lot is: Tenant Options, most of these deals, have the tenant has the option to extend it they want, and it is sort of hard to predict whether or not they're going to stay. Sometimes they like to hold on to the last second. So what you can do as a landlord is just be very transparent with the brokerage community. When the existing tenant needs to let you know, or when their expiration date is so people looking for space the market can bring opportunities to you if you consider in the event that.

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