What’s available and what does it cost for a Business Lease in Prescott?

This week let’s talk about what is actually available for business lease space in Prescott. I am going to focus on retail, office and industrial space, excluding land with one restaurant property thrown into the mix. 

At first glance you might think there is a lot of available or vacant properties with 107 spaces listed for lease, that seems like a lot for our small town. However, when you reorganize and review the data you begin to realize that two projects together have 69 of the available spaces and there is one very large industrial warehouse. The two projects with the majority of available space are the Prescott Gateway Mall and the new (under construction) industrial complex on Cirrus.

When you factor these out then you are realistically only looking at 37 spaces available for small business leasing.  These properties are a mix of 20 retail, 16 office and 1 restaurant space. That really isn’t a lot of available space for small businesses to choose from, especially if location is key to marketing your business and if you don’t want to be located in the mall.

Now a look at the pricing, at first glance pricing appears to be low, with a median price of 1.50/SF/MO.  However, when you dig a little deeper and look at the lease types for these spaces, you realize that a majority are offered as triple net leases (NNN). That means the tenant pays their proportionate share of all the building expenses in addition to their base lease rate. The NNN portion is rarely capped and will change from year to year as costs increase at the discretion of the landlord.  These rate changes, normally trend higher and very rarely lowered. So, the reality is that the actual lease rate is going to be much higher than 1.50/SF/MO.

I have included a graphic and a spread sheet to help tell the story from a visual perspective.

Prescott is an amazing and desirable town for everyone. People are still moving here in large numbers and tourism continues to thrive. This creates demand for all our local, small businesses and an opportunity for them to be more and more successful. It might seem a little daunting if you need to find the perfect location and get a fair lease, but with the right Broker on your side this process can be both smooth and financially beneficial you. That is what I am here for! With 30+ years of experience behind me I can be your commercial real estate educator, guide, advocate, negotiator and make sure you put your business in the best possible location with the best possible lease for your success.