Property taxes: This cost makes up a large percentage of the expenses when leasing space and varies per state and county.In 2022, the US commercial leasing market was valued at $172.1 billion. You’re not the only potential tenant the landlord is considering, and someone else might make a higher offer to win the retail space you’re eyeing. Competition for the space: In many high-growth cities, commercial space is at a premium.To lower lease costs, see if you can negotiate this and handle the upgrades yourself. Lease incentives: If the lease comes with incentives such as regular improvements, then this will add to the cost.However, you can still negotiate on short-term leases or for temporary retail arrangements like a pop-up shop or store-in-a-store. Length of term: In general, the longer the lease term, the more bargaining power you have.Depending on what the space is already outfitted with, any existing or included equipment could impact your monthly lease payment. Equipment: You may need setups and equipment for plumbing, gas, electric, or climate control like walk-in freezers.Condition of the space: If a retail space is essentially move-in ready, you’re going to pay a lot more than you would for a similarly sized space that needs improvements or remodeling.Demand: If you’re eyeing a convenient location for shoppers-such as a spot with a variety of additional shops around, ample parking space, and other amenities-prepare to pay high lease costs.Location: High-traffic and high-visibility locations often increase the lease costs as they place your store in a prime place for high foot traffic.

Although this list will vary from city to city, here are some of the main factors that influence retail leasing costs:

Tips on renting space in a shop