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Finding a location for a new store or office (or in this case both) can feel like you’re chasing a moving target. You have to be concerned about your customers, your employees, the rent, the type of buildings available, etc. In our case we have a national base of customers but we wanted to make it easy for locals to get to our showroom and warehouse and for customers coming in from out of the area to find us. Our initial inclination was to locate near a competitor. There is a synergy that often builds when a customer can hit 2 or 3 similar businesses in one area. It’s an easy shopping experience and in fact each business often finds that their sales increase. In our case we have two primary local competitors, one in downtown San Diego and the other in the center of San Diego county in a retail-industrial area about 7 miles from downtown.

Rather then basing our decision on our competitor’s locations we decided to find a customer centric location . Where was the best spot in the county for the majority of our local customers to easily reach and where was the best spot for our out of town visitors to easily find us? To that end we started analyzing the potential venues.

Population growth in San Diego has been north, east and south but the central core has also been gentrifying at an amazing rate. Getting in to downtown or the central industrial areas has become a chore due to traffic and once there the level of activity can feel chaotic. Further, our employees who have been working 3 blocks from the ocean, were less inclined to urbanize their work place then others might be. To that end we started looking in Sorrento Valley, a retail, industrial area a few miles north of San Diego. Sorrento Valley is close to the coast and within minutes of the the 5 freeway, a major LA-San Diego artery. Not too many locations appeared to be available but after extensive driving, phone calls and finally help through a great real estate broker we found a potential space.

The building had been vacant for 9 months, was mostly offices with some warehouse and was in what felt like an almost rural environment. Located on a quiet street with loads of parking, everyone who looked at the site remarked about how comfortable it felt. Even my wife liked the space and she can be a hard sell. So we started negotiations. Of course as soon as we wanted the space other prospective tenants materialized but we just kept our demands simple and reasonable.

1) All the building systems had to be in good working order. (HVAC, Power, Ceiling, etc.).
2) The building had to be in compliance with ADA handicapped access rules.
3) We needed new wall partitions, lights, ceilings, paint, and flooring. (about $70,000 dollars worth.)

And we paid them what they asked for in rent at $1.00 per foot. And they said, “fine”.

When we got the lease I had a few changes. My broker had more and we negotiated those. Some issues the landlord would not relent on and in a conversation with my broker I said:
“What’s the next lowest rent we’ve seen”.
He said: ” $1.35 per square foot”.
I said: ” At 9000 square feet that’s $3,150 more per month times 60 months. Total: $189,000. Plus, their giving us about $50,000 more in tenant improvement allowances then the other landlord’s and some free rent. If we blow the lease over a few nonessential lease provisions we will be out $250,000. Let’s sign now”.
And I did.

So now, on November 16, 2007 we’re in the building phase. We have a permit and we’re rushing towards an early January move-in date.

Next:
Designing the store and offices and implementing the construction process.