Top Tips for a Retail Property Leasing Strategy
When it comes to leasing commercial property today, the challenges of the real estate market and the retail sector put a lot of pressure on both mall owners and retail tenants. As retail leasing experts, we must have a comprehensive understanding of the local real estate market in our location.
With the retail property segment coming under some pressure from changes in customer and buying behavior, we now need tenants that are better suited for current and future levels of business.
Some tenants have been significantly affected by the purchases generated by the Internet. With that being the case, those tenants may not need to move out of the existing tenancy mix, but they do need to go through some adjustment relative to current occupancy. Relocation or contraction may be an alternative.
These are some of the alternatives available as adjustments to a commercial property.
- Identify the successful sales patterns behind your anchor tenants. Specialty tenants are likely to be able to complement the anchor tenant offering.
- Destination type renters will always attract people to the property. They should be positioned to drive customer traffic through ownership and engagement.
- All tipping points and entry gates on and within your property must feature smaller leases. The largest leases should be located between the inflection points of the property.
- Underperforming lessees should be encouraged due to a shift in customer buying patterns to smaller lessees. This assumes that the tenant in question offers a product or service that is still attractive to customers.
- At lease or lease option expiration, negotiate with lessees with due regard to customer spending patterns and overall sales figures. Your primary focus as a property manager or lease manager should be on increasing client numbers and sales results.
- If a tenant unsuccessfully trades in the property, and it is recognized that the reasons are beyond the control of the tenant or property manager, then it is best to achieve a change of tenants at the appropriate time. A controlled change of tenant is better than a long-term vacancy.
Good existing tenants within a mall or mall will be the draw cards for other tenants to build around. This is where the bundling process becomes really important in the retail holding mix strategy. Similar tenants within a single theme or complementary theme should be placed close to each other. That way, a single sale can be extended to a nearby complementary tenant.
Shoppers like convenience and will spend more money if they are drawn to a complementary product or service soon after the initial purchase. This is the basis of pooling within the holding mix.
It is interesting to note that the average buying patterns between male and female shoppers differ greatly. Male shoppers will tend to visit a mall for a single purpose if they are alone. They are very likely to spend little time at the property and are less likely to purchase more than one or two things. This pattern will change if the male shopper is in the company of others.
On average, female shoppers spend a greater amount of time in a shopping center. They are also more likely to socialize with friends and buy more items. Buyers tend to look at a lot of things and go through a lot of leases during the buying visit.
A shopping center should be designed for both types of shoppers. In this way, you will encourage continued trade and purchases by tenants within the tenancy mix.
