By Ben McLeish
In leasing a retail center, the key is to fill it with tenants in a way that’s going to maximize long-term profitability. Otherwise, what’s the point?
With that in mind, here are six points to consider as you work on your leasing plan for a property:
1. As you consider what you want your tenant mix to be, focus on tenants that will attract customers who visit more than once a week. The type of tenant is a major driver of overall customer traffic for a center, and odds are these customers will start visiting the center’s other retailers. This is why retailers in grocery-anchored centers do so well. Some other examples of this type of tenant include restaurants, fitness centers and educational facilities.
2. Sweat out the details when it comes to the appearance of the center. Are signs looking worn? Are all the tenants using their sign space properly? Is the parking lot well-lit and in good condition? Is the landscaping looking crisp? Are tree canopies hiding storefronts or signage?
The first impression of your center is critically important. When potential tenants visit for the first time, will they be impressed? Also, make sure your vacant spaces are clean. You don’t necessarily have to build them out, but they shouldn’t be a turn-off.
3. Study the market to target retailers that are thriving and would fill a void in the submarket. We are having good success with mid-sized pet supplies stores and “fast casual” restaurants, as two examples. Also, consider the possibility of having a medical office, weight loss clinic or walk-in clinic in the center. These are excellent traffic generators.
4. Don’t assume that the quality of the center’s location will stay the same year after year. This could work in your favor, or become a problem. What happens up and down the road from your center matters to you. With that in mind, keep up with customer demand in your submarket, and be prepared to adjust your tenant mix if needed.
5. If your spaces aren’t proving to be popular, reconfigure them. Large, deep spaces won’t work anymore for retailers in a lot of cases. They want frontage and visibility, but are looking for smaller spaces. Think about creating spaces that aren’t as deep, and if you create some space that can’t be leased, so be it. That beats having a vacancy.
6. You have to be competitive on your lease rates, or you’re wasting your time. Don’t give space away, but realize that thriving retailers have plenty of choices for space in this market. If you aren’t competitive with retail centers down the street, you won’t get the tenant. It’s that simple.
That said, think about having both a short-term and long-term plan for your center. In the short term, be aggressive with the goal of filling up your center with quality tenants. In the long term, focus on renewals and ways to increase profitability.
— Ben McLeish is director of retail services for Colliers International Tampa Bay. He focuses on helping retail owners lease centers in West Central Florida.