If you own or invest in retail space, it’s essential to understand the strategies behind creating the ideal tenant mix. After all, the success of your shopping center depends on your ability as a landlord to understand the demographics and needs of your market and then to attract tenants to serve those needs.
That said focusing on customer needs exclusively could be a recipe for disaster. You must pay attention to and balance the needs of your tenants as well--with the ultimate goal being to create synergy between retailers that results in higher sales together than individual stores could achieve on their own.
“A good mix of tenants creates more activity in a building or strip of stores,” said Samuel Mizrahi, President of the Commercial Division of CENTURY 21 Mizrahi Realty in Brooklyn, N.Y. “The mix complements each other with very slight competition. And they feed from each other.”
Strive to attract tenants in different industries—a grocery store, dry cleaner, pizza shop, and bank, for example—and remember that a good tenant mix also involves leasing to a mix of national, regional and local tenants. Make sure the tenants are compatible with one another, and decide in advance the square footage you will allot to each merchandise category. Give consideration to product pricing as well; higher-priced and discount merchandise each appeal to different segments of the buying public. The merchandise offered should be at a price point that appeals to local buyers.
“Landlords should always protect the interest of the tenant and help them to be more successful,” Mizrahi said. The more successful the tenants, the more successful the shopping center.
And that’s good for everyone—tenants, customers and landlord.
Interested in learning more about how to create the perfect tenant mix in your neighborhood shopping center? Contact our CENTURY 21® Realtor® Tony Kostovski