What are best practices for getting the right tenant mix for retail strips?

What's the right mix? What's the wrong mix?
In Leasing Property - Asked by Warren K. - Oct 1, 2008
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Answer(s)

Kelly K.
Owner/Investor
Cincinnati, OH

You want to ensure that the mix is good for the tenants leasing (so their business does well especially if they are paying percentage rent, and to keep them happy and renewing)as well as the owner of the retail center. You need to factor is what the tenants requirements are for parking- i.e. fitness centers typically take up a lot of parking as do movie theatres. You will also want to get a good mix as far as co-tenancy and categories- for a neighborhood strip that is grocery anchored that is typically- fashion, hair care, insurance, fast food, cell phone, etc. users that will complement each other as well as drive traffic to one another. Most national retailers will have exclusives (so they can be the only one of that type of category) if the center is a small to mid size center- so you won't have 2 dollar stores etc.
Typically, upscale stores will not do well with discount stores, you want to make sure you have one of each retail category and think of how when and where you shop and what drives you to that center. That will make the most succesful retail tenant mix.

Oct 9, 2008
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Juan G.
Broker/Agent
Ontario, CA

It really depends on the area, quality of strip center, local demand, and several others. But in general most strip centers will not attract national tenants or upscale retailers (unless of course it is on Melrose or some similar street or area). Most strip centers are typically a convenience store, hair salon or nail salon, tax office, cell phones, etc. Do not rent a strip center to a church or anyone who will burden the parking lot as most strip centers cater to convenience. Hair and nail salons should be avoided if possible unless you have great parking as they will burden your parking lot for extended periods which will cost sales volume to the cotenants, lower sales volume will turn into less likelyhood of your other tenants renewing at a premium rate. Cell phone stores have a high failure rate. If you could get a donut shop, dry cleaner dropoff (not a plant), discount cigarette store, they are typically great tenants for strip centers as they have longevity and drive traffic to the center. Stay away from massage parlors as they burden parking and many prospective tenants and their customers percieve that massage parlors engage in illegal prostitution, if they are the customers will park on adjacent streets and centers and you will damage your relation with nearby residents and proeprty owners. Dentists are usually good tenants but a pain in the ass to negotiate with. Pizza takeout & delivery are perfect tenants if you can land one. email me if you have any more questions, I am not looking for more listings so rest assured that my opinion is unbiased, and I know what I am talking about as most of my listings are smaller centers. leaseretail@gmail.com

Oct 24, 2008
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