Tips to design retail space for any future tenant

A rendering of Rev360, a mixed-use office building Haselden Construction is developing and building in River North with a retail component.

Nicole Kawulok
Acquisitions and development manager, Haselden Construction

Unless you are working for a specific client in a build-to-suit situation, building retail space can feel like a guessing game. How do you create a core-and-shell building that is the most appealing to the widest range of possible tenants? Large or small, restaurant or retail – you want your space to accommodate any and all of them. While nothing is foolproof, there are several steps you can take to help ensure your space attracts the most potential tenants and makes their move-in as quick and easy as possible. This article specifically addresses retail space in stand-alone buildings, however, many of the items can be applied to mixed-use projects where retail space is part of a larger building.

• Demising. Demising is the easiest matter to address: Don’t do it until you have to. Leaving the space open allows you to construct demising walls as you establish leases and determine the amount of space each tenant requires. If you want to get an idea of the maximum amount of partitioning you may be doing in the space, keep in mind that the smallest tenant generally wants a minimum of 20 feet of frontage (given a minimum depth of 60 feet, your smallest tenant will be 1,200 square feet). Once you do begin leasing the space, start from the outside of the building and work toward the middle; this makes the remaining space in the building more versatile.

• Utilities. Providing easy access to utilities is a key element to making your space usable to the greatest number of possible tenants. Systems to consider are sewer, water, telecommunications, electrical and grease traps with some of these being overhead and some underground. Retail spaces usually are located within one overall retail building, making it ideal to run all the utilities parallel across the back of the inside of the retail space. This location works because retail tenants usually will want their restroom and/or kitchen access at the back of their establishment.

Regarding the concrete floor, it’s good practice to pour most of it, allowing for a “leave-out” in the concrete that extends 10 feet from the back wall. This gives a future tenant ability to access the underground sewer line in the back of their space at any time. If the space is leased by experienced tenants, they may end up cutting some of the poured concrete anyway, but if a less experienced tenant comes along, it is usually less intimidating to see things as finished as possible.

Both water and telecommunications are run overhead from the building utility or roof access room. By running water piping across the back of the entire retail space and stubbing out a shut-off valve for a tenant to tie into every 20 feet, you’ve prepared for filling the space entirely with small tenants, while also being prepared for larger tenants. If a larger tenant leases the space, it simply doesn’t use the stub. It is always significantly less expensive to add enough services during construction than adding them after the fact.

It’s a similar approach for telecommunications. By running conduit overhead along the inside of the back wall and placing a pull-box every 20 feet, you’re ready for any tenant, small or large. Additionally, the telecom company can simply pull lines through the existing conduit without having to perform any additional construction work. On a related note, the beginning of construction is a good time to touch base with telecom service providers to discuss having them bring their services to the site. Doing this at the beginning of construction is easier and less expensive than after the building is complete. Having multiple providers available is another benefit that could attract more tenants.

Planning for electrical can be a bit more tricky. Generally, tenants will require at least 200 amps if they are retail (soft goods) and 400 amps if they are a restaurant. Until you know the precise mix of tenants you have, you won’t know the exact electrical layout you’ll need. However, you can prepare by making an educated guess. What you can do is configure a design to ensure the amperage capacity into your building can support the maximum amount of restaurant space you anticipate. Once you have a tenant, you can then install the specific electrical box size they require in their space. While it may feel uncomfortable to wait, it keeps you from wasting money on unknowns.

In the same vein of thought, if you want restaurants in your space, you need to put in a grease trap. Similar to electrical, an educated guess is required to size the grease trap based on the percentage of restaurants you estimate leasing your building. Each municipality has its own requirements determining the size of the grease trap in relation to the size of the restaurants.

• Storefront. Utilizing a modular storefront system that is mostly glazing works well for retail. A system using 4-foot- or 5-foot-wide sections can be partitioned into 20-foot increments, making the exterior space easily demisable.

Set-back from the street is another consideration. If restaurants tenants are a possibility, they may be interested in an outdoor seating and patio area. Generally, you should plan for at least 15 feet between the back of the curb and the outside perimeter of the building. This allows for enough room for a patio and the required clearances for Americans with Disabilities Act regulations. If your building provides this possibility, it’s a definite selling point.

Many buildings are 40% to 50% preleased before construction even begins, which helps this process considerably. However, even beginning from scratch, following these guidelines will give you a good starting point. Ensuring tenants have easy access to the underground utilities, sufficient electrical capacity in the overall building, waterline stubs and telecom pull-boxes available in the space, and a readily adapted storefront may be the difference between leasing the space and losing a tenant to another building.

Featured in CREJ’s May 2019 Retail Properties Quarterly

Edited by the Colorado Real Estate Journal staff.