Tenant Mix and Tenant Placement

Every retail shopping centre property is different and should be assessed individually to ensure that you locate the new retail tenant well in the tenant mix. When you get the balance wrong it will impact your foot traffic, rental, customer interest, vacancy factors, sales, and other tenants. So what should you do? Gather all the right property information and take the time to assess what you find; this is well before you make a placement change or tenancy decision.

The old adage ‘position, position, position’, still rings true with retail property tenant mix. Each property is a mixture of good, average, and bad locations. To assess this and improve it you should immediately understand:

  • the entrances points to the property
  • visitations needs and decisions of the average customer
  • the way in which people travel into and through the property
  • the car park interaction, access, and usage
  • public transport impact on the property
  • common areas of the property where people congregate
  • the time spent in the property by customers
  • the days of the week that people prefer to shop
  • what people want when they shop
  • the most popular tenants and the reason why they are so favoured
  • Are your most popular tenants leaving in the future and if so why?
  • the most unpopular tenants and the reason why they are so disliked or avoided
  • signage impact and placement across the property at all points of entry and exit
  • tenant lease duration and termination dates
  • existing vacancy factors and threats that could destabilize the tenant mix

All of these factors will put you on the track to a reasonable property assessment and improvement. A visit to other nearby shopping centres will also help you to identify what impact those properties are having on your property.

Customer surveys and questions taken on different days of the week will help you know what the community thinks about the property and its benefit to the customer.

Always walk around the property!

You have to have a good understanding of what works and does not work in the property, take a walk around on different days and at different times over a period of a couple of weeks. Ask people questions about what they think of the property and its history. Observe the levels of stock that the tenants are holding. An abundance of old stock on sale could be a sign of trouble; similarly a lack of stock for some tenants is also a reason for concern.

Here are 10 key facts to look at in the physical property inspection. They are:

  1. Are the road and highway access points to the property good or hindered from all or any directions? Know what happens at the property at peak traffic times and at the end of the day when people are travelling home. How can you capture that passing traffic?
  2. Look for road closures and changes that exist and also those that are in the planning process at the local or regional planning office. Are there any physical barriers such as creeks or geographical barriers that channel people and customers to or away from the property in a particular direction?
  3. Is the banner and pylon road signage exposure of the property of good quality and can that signage be easily seen? It is possible that fresh signage will help or reposition the property in the mind of the shopper. Take pictures around the entrances to assess the visibility of the signage. Remember that night illuminated signs should also be assessed.
  4. Is the property easy to locate for the community? It is possible that you will also have customers from outside your region visit the property, so how will they find you?
  5. Is public transport available? If so where and at what frequency? You will need to understand just how many people use that method of transport to get to the property, on what days and at what times.
  6. What is the identity or branding of the property and can it be clearly seen from the road. Is it modern and adequate? Does that branding means something to the shopper and will it leave a positive impact?
  7. Look at the car parking to see what works and doesn’t. If the shopper cannot enter the property easily and get those convenience items quickly it will restrict your trading and growth. Does the parking around the property support all the Customers and Tenants well? Does it need re-design or functional changes? Does it need new and fresh signage? Remember that the car park signage is the first thing that most people experience when they visit the property. If the public cannot see or understand the signage then you are setting up for a problem.
  8. What customer services exist in and around the property? Are they adequate and modern? (Parking, Toilets, Malls, Seating etc.). Make sure that they can be found when people need them. The quality of the common areas and services will leave an imprint in the customers mind.
  9. Look along the shop lines and entrances. Are ‘sight lines’ open and un-cluttered to the retailers shops? This will impact on sales and how the customers move through the property. The shops have to be seen and the entrances should be welcoming. Include in this visual assessment a review of tenant’s signs and lighting; no shopper wants to visit an unwelcoming shop that is dim and dark. Pay particular attention to the lighting from the front to the back of the shop as it should be of similar high quality illumination. Many poor retailers destroy their customer shopping experience (and sales) by neglecting illumination at the rear of the premises.
  10. Are more customer services needed in and around the property and if so what? Asking customers what they want or could see as an advantage in the property will help your tuning of the tenant placement and mix.

All of these factors affect every retail property and help it on the road to positive rental and tenant mix success. Once you understand these property issues you can make wise decisions regards the tenant placement. It will help you lease the new vacancies and mix the tenants more effectively.

Tips To Get The Perfect Tenant Mix for Your Retail Property

The ultimate goal for any landlord is to achieve maximum income from their retail property. However, that does not imply that they must lose focus on the bigger picture and let their space to any retailer who is interested in the property. Maintaining the perfect tenant mix in the property leads to increased foot traffic, greater spend, delighted tenants and ultimately more demand and better rates for the property.

Read on to find out the five ways to create the ultimate blend of tenants for a retail center.

Study the demographics of the environment

The demographics of the nearby locations play a vital role in determining what kind of retailers will best tick among the shoppers. Conduct surveys and collect information pertaining to what your target customers would like to see in the area around them. For instance, pharmacy stores may be a valuable addition for an aging population.

Talk to your existing tenants

Existing retail tenants may be a good source of providing insight into what brands and products can add more value to their own store and ultimately to the landlord. Analyze the performance of the stores and take a deeper look into their strengths and weakness and build ways to overcome or enhance them.

Mix brands and categories

A retail center that draws a balance between the big and the small brands and has a wider collection of product categories than simply focusing on part of the demographics enjoy better foot traffic. Choose tenants from various product categories and be sure to include local retailers who always have something new and fresh to offer. Look beyond the retail line up and set up service facilities like ATMs to optimize the time and effort spent on creating the perfect tenant mix.

Make market assessment a part of the responsibility

Tenants come and may go at the end of the lease. This may interrupt the existing interconnections within the retail space. For instance, men visiting your retail center to buy baby diapers in one outlet tend to grab a few drinks at the next one. Retail centers must continually invest time and effort to assess the market and ensure that their tenant mix is optimizing the overall performance.

Hire a good commercial real estate property company

Commercial real estate property management services have mastered the art of using several proven techniques in finding the right mix for any kind of retail property. They study the area around the property, analyze the geographical pros and cons of the place and have seasoned real estate experts to work on the tenant mix. They perform competitor analysis to check what products and services are missing in the area and also work towards acquiring high quality tenants for the property.

Landlords and real estate companies can use real estate property management services to manage tenant relationships from the start till the end while they focus on other core activities.

Commercial Real Estate Tenant Screening Checklist

The length of a commercial lease is more than a residential one. Generally, a commercial unit is rented for 3-5 years. Since it involves a great deal of money, it’s important to screen tenants before renting. Read on to know the essential commercial real estate listings before renting out an office space.

Have an established process for screening tenants

One must have an established process for screening inhabitants. Prospective renters must fill in an application form. In the form, one must seek permission to do a credit check. The method makes sure that there is no discrimination by the landlord while leasing out his property.

Review credit report

There are many online services which run credit checks on inhabitants on the behalf of landlords. After receiving the credit report, owners must review it carefully and ask for an explanation if there is any delinquency. The report will make it clear whether the tenant has a history of paying bills late or has suffered bankruptcy.

Get personal information

While leasing out a commercial real estate for rent, owners must ask for personal information of the lessee. Often during such a deal, tenants use the company’s credit, information, and not their own personal information. If the inhabitant is new in the business, it’s the right of owners to know whether he/she can pay the rent incase the business shuts down. Personal information will also help proprietors to know if the renter has a criminal background or not.

Contact previous landlords

Most applications ask tenants to fill name and contact information of their earlier landlords. However, owners tend to overlook it and don’t call up past proprietors for references. It’s a huge mistake as a past owner can give valuable information, which is not available otherwise. Therefore, before renting it’s imperative to contact previous owners of the prospective occupant.

Get help from tenant screening firms

It’s not always possible for an owner to do all the checks on his own. In such a scenario, they must seek help from tenant screening firms who do credit checks, reference check, etc. Landlords can make a decision based on the report of such firms.

Interaction in person

The last part of the screening process should include a face-to-face interaction with the renter. There are several things that can’t be communicated in an application or telephonic discussions. During such interactions, owners must study the body language of the lessee. This is a great indicator to know whether the occupant is reliable or not.

Proper screening doesn’t cost owners much, but reaps huge benefits for them in the long run.