Before You Sign the Lease: Five Hidden Factors That Determine Whether Your Business Fits the Space
Small business owners, churches, and organization leaders often fall in love with a space long before they know whether it truly works for their business or organization. The layout feels right. The location is strong. The rent seems reasonable.
Then—somewhere between the offer letter and the first contractor walk-through—reality hits:
The space may not be legally or physically suitable for your use.
Whether you are opening a café, retail shop, restaurant, church plant, or community gathering space, the most significant cost drivers are rarely finishes or furniture. They are the invisible compliance issues buried in zoning, building code, mechanical capacity, and site limitations.
This guide outlines the five critical issues every tenant or buyer should resolve before signing a lease or purchase agreement. And no, it's not the landlord's responsibility to tell you, or your real estate broker, who may or may not be legally required to find this out for you. It depends on your agreement.
1. Zoning: Is Your Intended Use Even Allowed?
Zoning is the first of the three regulatory layers your project must satisfy. Your intended use must align with what the zoning ordinance allows on that property—regardless of what a landlord or broker may say.
Zoning determines what you can and cannot do, including how the space can be legally occupied and used.
The key questions to answer early:
How does your use align with the zoning ordinance's definition of use?
Is your use permitted by right (good as-is), conditional (extra hoops to jump through), or prohibited (requires a complete rezoning)?
Will your project trigger a rezoning or special-use permit, or will the zoning staff have to approve? Will there be a public hearing and a full board vote?
The potential hidden thorns: Are there restrictions on hours, noise (dB levels), outdoor activity, or deliveries?
Zoning determines parking, setback, or buffer requirements. We can show you how this will affect your plan.
We meet people all the time who don't recognize that minor distinctions to them—such as a yoga studio or church classified as assembly rather than retail—can significantly alter approval paths, parking requirements, and construction costs.
Please start with a brief zoning verification at the front end to avoid months of delay and substantial redesign costs.
2. Occupancy Classification: Does The Building Match Your Business?
The building code is based on occupancy classification, not branding or intent. Typically Retail (Mercantile), Cafes & Restaurants (Assembly - that serves alcohol), Churches (Assembly with large peak time attendance), Flex Space (Storage with limited Office OR Business with limited Storage).
But the calculation starts with:
What was the previous fire code requirement (Alarm, Sprinkler, Hydrant)?
What occupancy classification was the space previously approved under?
Based on the above, what are your requirements?
A change of occupancy can trigger major upgrades, even if the space looks "move-in ready."
Common examples include:
Retail converting to assembly (church, fitness studio, brewery taproom)
Cold-dark-shells (Spaces that have never had construction done inside them) converting to medical/offices, café, or specialty retail
Warehouse converting to public-facing retail or event space
These changes can affect:
Mechanical system sizing
Fire-resistance and separation requirements
Exit widths and egress paths
Restroom counts and accessibility
Fire sprinkler requirements—even in small spaces
Understanding occupancy classification early allows you to plan for realistic costs rather than optimistic assumptions.
3. Mechanical, Electrical, and Plumbing: Does the Building Have the Capacity?
This is a usual milestone where many tenant improvement projects fail.
Landlords often deliver spaces with "as-is" systems that are undersized for the new use. Restaurants, cafés, commercial kitchens, fitness studios, and churches usually require two to four times the HVAC, electrical, or plumbing capacity of prior tenants.
Key considerations include:
HVAC tonnage and outside air requirements
Electrical service size and panel capacity
Fresh air, exhaust, and make-up air needs
Plumbing fixture counts and water heater sizing
Grease interceptors for food service use
If existing systems cannot support your use, costs escalate quickly—sometimes requiring structural reinforcement for new rooftop equipment.
4. Site and Parking: The Most Common Deal-Killer
Parking is often the fastest way to determine whether a project is viable.
Three factors must align:
The number of parking spaces required by zoning for your specific use
The number of spaces included with the lease or available on-site
The minimum and maximum parking allowed by the zoning ordinance
Each use—church, café, retail, restaurant—has its own parking ratio. A change of use often changes (not in a good way) parking requirements and may trigger:
Off-site parking agreements
Shared parking studies
Traffic impact studies ($10k to 50k typically)
Questions to ask early:
What is our zoning-defined use, and what is the required parking ratio?
How many spaces are included with the lease?
Are off-site or shared parking agreements permitted?
How does a change of use change the parking requirements?
Parking issues are far easier to solve before you sign a deal.
5. Cost and Timeline: What Will This Use-Fit Really Take?
Once zoning, occupancy, and system capacity are understood, you can establish a realistic budget and schedule.
Pre-development analysis typically takes three to six weeks, depending on complexity, and often includes:
A test fit to try out how you would fit the space
Code review to list the compliance and the changes needed
Mechanical, electrical, and plumbing capacity checks
Parking and site quantitative review
A rough-order-of-magnitude budget for time and cost
If you know this before you start communicating with a landlord via your broker, clarity always strengthens your position when negotiating tenant allowances, lease terms, and responsibilities.
How Facet Development Helps You Avoid Expensive Surprises
Facet Development helps business owners, church leaders, and small developers validate spaces before they commit. Our Use-Fit and Test Fit packages provide clear guidance on zoning, building code compliance, mechanical capacity, and parking—early enough to make informed decisions.
If you are considering a space in the Southeast US, we can help you determine:
Whether the space truly works
What will it cost to make it compliant
How to move forward with confidence
