A local crossfit gym had been in business for several years but the capacity of their facility was not accommodating their growing membership. They were referred to Lowrey Burnett, CCIM by a previous, satisfied retail tenant. Having spent their days building their business and not keeping tabs on the current commercial real estate trends, they sought expert guidance on the pros and cons of leasing versus buying a commercial retail property prior to their upcoming relocation.
The Situation
While occupying a retail property with limited on-site parking, the owners of a Colorado crossfit gym realized their rapid growth had overwhelmed their small facility and was becoming a point of frustration for their existing paying membership. They needed to relocate to a larger facility that provided the necessary amenities and kept them close to their loyal members. Burnett was ready to help them analyze the lease versus purchase options and make the prudent financial decision for their business.
The Challenges
Initially, the client wanted to purchase a property, rather than continue leasing space. Unfortunately, continuously increasing real estate prices, higher construction costs, and limited financing options ultimately lead Burnett to recommend that purchasing was not a viable option. Burnett then focused the search on lease options. Location was a primary determining factor for this client. The retail business owners had to avoid being too close to the locations of their competitors, while also staying within a 3-mile radius of their existing clientele. The latter was essential for a successful relocation of a service-oriented business.
Last, but certainly not least, the client had a modest budget relative to the facility size and current asking rates within the urban submarket they desired.
The Results
The client engaged Burnett with two years left on their current lease, so they had plenty of time to perform a thorough search and make a sound decision for the business. After over 18 months of property searches and numerous tours, the client successfully closed on a long-term lease at a below-market rental rate in a highly-visible and easily accessible retail property. This demonstrates Burnett’s commitment to always give 100% to each client no matter how long it takes. With additional square-footage and more available parking, the new facility allowed the gym to grow further by accommodating additional members, more classes and offering additional services like day-care and physical therapy which increased top-line revenue.
The Stats
Lowrey Burnett, CCIM-designated broker acted as the buyer/tenant representative for a client who successfully leased a retail space at below-market rates.
If your business is growing and your current retail property can’t keep up with your plans and dreams, contact our tenant representative at Fountainhead Commercial today.
