Retail space for lease within Commercial Buildings

[de1irium]

Hi, fellow capitalists.

As a long-time player of this game, I would like to bring my latest idea to the great flow of suggestions. I would like to see retail spaces for lease. I believe this would be a great plus to the game, especially in the beginning where nobody has much cash to spend, but also later in the game when you want to take position in a downtown area, but there is no more land available. The cool thing is that it could simply be done within the actual commercial buildings, where a retail store would "occupy" the 1st floor as it very common in our cities. Again, I believe this would be especially great in the beginning because we could then decrease significantly the start-up capital, which would lead to a way more fierce competition in which every dime would have to be spent carefully. We could then see which corporation is solid enough to take the lead, and, if possible, the need of having to sign a lease (or contract to some people) could lead to the bankruptcy, early in the game, of weak corporations having made bad decisions ; an idea that will certainly please the experienced players in quest of an always more difficult game.

First of all, we'd have to determine 3 things :

-the size of the rental : easy! the retail store has to fit the size of the building. Thus, a 2x2 commercial building could host any of the 2x2 retail stores (such as a convenience store, or a drugstore, or maybe a bank (but we don't know their size yet!)), whilst the bigger one (3x3) could host the 3x3 retail stores (even though such stores appear to be bigger than the commercial building itself, but this is just a matter of scaling) ; this feature would be impossible for discount megastores due to their size (4x4).

-its rent : the easiest payment method would be a fixed monthly rent according to the rent/sq ft. At a rent of $21/sq ft (an average price in the surroundings of a CBD in 1990), if we consider that every tile on the map is 5,000 sq ft, the fixed rent of a drugstore (20,000 sq ft) is $35,000 monthly ; $78,750 for a 3x3 retail store such as a supermarket. These numbers fit those of the balance sheet in my opinion.

-the term (again, if possible) : it could be a contract of 1yr, 2yr, 3yr, 5yr or 10yr fixed at the price in effect at the time of the rental (this way you would benefit from signing long-term since the rent would stay the same despite the inflation).

I briefly imagined the panel to look this way when the retail space is free :



Otherwise, when the retail space is taken, we should get information about the tenant and the term ending date, as well as a tab to swap to the default retail store panel.

A commercial lease automatically renews unless the tenant notifies the landlord. There should then be a "Do not renew" button : in case it is activated, the store is "demolished" when the term ends, and the retail space becomes free again. There could also have the possibility to break the lease, but a penalty would be charged in this case.

"If the idea of having a lease is too complicated though, the system still works without it, except a corporation could move in and leave whenever it wants.

Additional features/requirements :
- A certain amount (about %20 of the traditional building cost) is charged upon moving in.
- Some random rental spaces taken by the local competitors.
- Adding For Lease category in the Firms menu.
- would there be the possibility to add floors ?

In the end, I believe this would not only make the game more challenging and bring new opportunities, but it would also be an answer to the lack of space ; an issue that will become more and more true as new buildings are added (I think particularly about the possibility of a Services DLC there).

Feel free to share your thoughts about it, but please avoid anything that would bring much further complexity as the purpose of this is not a complete remake of the game.
Thank you, and happy holidays!

[David]

Your idea is very refreshing and sounds fun.

In practice, there are a few things to consider. One of them is how to make it recognizable on the city view when the player is leasing the ground floor of a commercial building for retail purposes.

Another possibility is letting the player buy land and lease it to other companies. What do you think?

[smith121362]

buy land and lease it to other companies.

I like this idea and would like to suggest the ability to build and lease out retail stores also. I can see 2x2x3 and 3x3x3 buildings for lease and the leasers could decide what kind of store it will be. ie. convenient, specialty, general, grocery, department, ect.

[David]

There is another post with suggestions on improving the real estate simulation:
viewtopic.php?f=14&t=5347

Would welcome any discussions taking the best from these suggestion posts and combine them into a format that is practical for implementation.

[de1irium]

Oh I didn't know about the other post. It is very similar.

One of them is how to make it recognizable on the city view when the player is leasing the ground floor of a commercial building for retail purposes.

I believe the icon of the lessee should be displayed below the usual icon of the building owner, just as if two firms were at the same spot. (Perhaps the lessee's icon should be smaller to avoid the map to be overcrowded in this case)

Another possibility is letting the player buy land and lease it to other companies. What do you think?

I would like others opinion on that, but I don't think that leasing land is a very common practice in real business. As of smith121362's suggestion to "build and lease out retail stores", the main difference with commercial buildings lays in the fact that they have no source of revenue at all if they are not taken. I wonder what is the player's (or AI) advantage in building a retail store that he/she/it intends to lease if they can't find a tenant. The main reason for the player to build a commercial building, however, is the demand for office space and its major source of revenue remains the occupancy rate of its office space ; the retail space is just an add-on. Anything like that such as shopping centres would be great to discuss though if ever comes the possibility of a Real Estate DLC.

[David]

I would recommend your suggestions to the dev team.

The construction costs of commercial buildings will need to be adjusted though, otherwise they will be profitable with the abilities of generating rental incomes from the office space and the retail space at the same time.

Anything like that such as shopping centres would be great to discuss though if ever comes the possibility of a Real Estate DLC.

Shopping centers can house multiple retail stores. It can be viewed as a logical extension of this new leasing feature of commercial buildings.

Besides these, what else would you like to see in a Real Estate DLC.

[Berbe]

The idea is great for realism, but scale is of the essence here.

As de1irium noted, retail stores look bigger while actually use the same land space up as commercial buildings/offices.
In reality, such big retail stores are always way bigger than their in-commercial-buildings counterparts which usually are tiny shops squeezed into available space there.
Maybe that could translate in less available slot for a similar number of used squares compared to the independent shops?

In addition to have less ground space available to the public, the tiny shops from commercial buildings also tend to have storage problems and have a greater cost per unit sold than independent shops, thus driving prices up (one logicial reason why the reason why stuff is usually more expensive there).
Maybe a premium on product cost might be in order?

Finally, there might be some leverage on the traffic index, because only a specific population (living nearby or working there) visits those. People who go shopping don't go to these places (traffic/parking trouble, prices, lack of product choices variety due to available surface) but rather choose independent shops/supermarkets/megastores in the suburbs.
Maybe that calls for a customer traffic penalty?

[de1irium]

In reality, such big retail stores are always way bigger than their in-commercial-buildings counterparts which usually are tiny shops squeezed into available space there.
Maybe that could translate in less available slot for a similar number of used squares compared to the independent shops?

I agree with you there. I think we have two options : whether they could in fact have less slots available on each floor as you suggest, or they could simply be like the usual shops without the possibility to add floors (just like the old-school Cap game) I think the first option is good for realism whilst the latter is good for the ease of management.

In addition to have less ground space available to the public, the tiny shops from commercial buildings also tend to have storage problems and have a greater cost per unit sold than independent shops, thus driving prices up (one logicial reason why the reason why stuff is usually more expensive there).
Maybe a premium on product cost might be in order?

Good one, I didn't think about storage. However, I don't understand how storage problems would lead to greater cost per unit. I believe they simply order less stuff and put most of it on their retail floor directly. I think the solution to this would be to reduce the amount of products / unit (which can be seen as some kind of storage) and that simply restricting the expertise level per unit to a certain amount would do the trick there.

People who go shopping don't go to these places [...] but rather choose independent shops/supermarkets/megastores in the suburbs.
Maybe that calls for a customer traffic penalty?

I agree with you, but this applies to the people that live in the suburbs. I argue that the actual traffic index is good because the closer the shop is to the CBD, the more it is likely to have hordes of workers and tourists as customers as well as the locals since the area becomes denser. The traffic index there is rather a walkability index.

[smith121362]

What about making a bank branch or an insurance branch on the bottom floor?

[Berbe]

It seems I started an answer which never got posted...

The traffic index there is rather a walkability index.

You are right: I might have been over-zealous at inducing penalties

The main concern here is having those commercial-building store getting to huge of money makers, compared to 'classic' retail stores of types they are in competition with.
Real estate is already way too easy of a cash machine, and contrary to reality, you can spawn brand new districts by popping appartments/commercial buildings, which will be profitable in most cases (well commercial buildings take into account distance to CBD, but with proper price yo ucan still reach more than reasonable RoI).
That means unrealistic in-game behaviours are to be expected. What happens if a player decides to replace standard real stores with one (or several, to compensate any induced limitation) commercial building(s)? They would add residential/office revenue to the same volume retail customers, all stacked-up in the same (scale-wise) land investment! even if you need to buy 2-3 land plots instead of 1 to compensate for smaller retail capacity, that would initially cost your a couple $10M, a drop in the ocean of afterwise generated profit.