Expert: Brian Bocchieri - 11/7/2008

Question
Sir, can you help me to know how to determine what rent is reasonable for a commercial property?  It is a conveniene store located near a highway.  Thank you.

Answer
Hello Jeff;

As with any real estate the market will determine what is reasonable.  For example a store on Times Square in New York City renting at $400 per square foot may be reasonable for a client looking for maximum exposure, a high foot traffic count and a prestigious address.

On the other hand a store in a rural area with a low traffic count and little to no foot traffic may be worth $10-15 per foot.  It all depends on the area you are located in.  There are also many additional factors to consider beside the rent ie; who pays the taxes, property maintenance, common area maintenance, reserves, ...

The best way would be to check with a local commercial realtor and get comps on rental property similar to yours.  You then can better determine what is reasonable.

I hope this helps, Wishing you all the best.

Brian Bocchieri