Personal Outreach Still Matters When Seeking Out Retail Tenants

by Katie Sloan

By Benjamin Halpern, Leasing Agent at Halpern Enterprises.

As owners and leasing agents look to find the right tenants for their retail centers, it’s important to understand the power of the internet in using electronic listing services, having quality websites and sending e-mail marketing blasts.

Traditional methods of building personal relationships in the surrounding area, and even going door-to-door to key targeted businesses, are also critical parts of the equation for success.

With that in mind, here are five tips that have helped Halpern Enterprises find the right tenants for our retail centers:

  1. Perform a thorough market analysis so that you can determine what the market is lacking.

Start by gaining a working knowledge of the market and the products or services it needs, and then match that up with a working list of retailers and service providers that have set up shop in the area. Using a “market void” analysis — a way of determining what high-demand products and services are lacking in a certain area — will help you recognize potential tenants and can launch your efforts in recruiting prospects that have the best chance for success in your center.

Using a market void analysis to start the process of filling a restaurant space, we recognized a need for a local, family-oriented sports-themed restaurant in The Shops at Belmont center in Smyrna, Georgia. Following preliminary research, we contacted an Atlanta-based restaurant, Whitehall Tavern, and after a series of conversations regarding the opportunity, the restaurant signed a lease for more than 5,000 square feet with a rooftop patio.

  1. Complete a competitive analysis of similarly sized retail centers, which will help in determining where certain retailers have success.

A competitive analysis doesn’t need to be extremely time consuming. Develop a complete list of the retailers, restaurants and service providers that are in the area’s other retail centers, and look for patterns.

How do certain retailers’ locations match the submarket’s demographics? Do specific tenants prefer outparcels or locations in the center itself? How do store sizes vary depending on what part of town the retailer is in? This type of information will help you distinguish patterns, and can help you narrow your target list to the most relevant list of potential tenants. This is fundamental to getting the tenants that will fuel the success of your retail center in a new market.

  1. Be prepared to offer help with tenant improvements.

It can be assumed that nearly every potential tenant will ask for some sort of incentive to sign a lease, whether it relates to the rental rate or providing tenant improvement dollars. It’s important to understand the type of business you’re pursuing in terms of their needs. For example, if it’s a business that requires a complex build-out, it can be assumed that this potential tenant will ask for more improvement dollars, and you should account for that in your financial proforma.

It’s always important to incorporate estimates of what these incentives may be into the financial projections for income from each potential tenant. By doing so, you’ll be able to know exactly what you are comfortable offering.

  1. Develop a network of high-quality retail brokers, and work closely with them.

Top-notch retail brokers can provide tremendous value, both in understanding geographic submarkets, and in knowing what local and national retailers are looking for.

It only makes sense to include the brokers from the start of your efforts. This approach has paid off for us — in fact, brokers are representing tenants in more than half of the leases we sign.

It’s important to build and utilize a solid network of brokers, as they often have wide-ranging knowledge and contacts. Once you have developed relationships with the network, it’s easy to pick out which ones will be most interested in your vacant space, perhaps warranting a personal email and not just inclusion in an e-mail marketing blast.

As an example, we specifically wanted to find a barbecue restaurant and a burger restaurant for our Rock Hill Crossing center in South Carolina. We sent specific information to local real estate brokers about the opportunity, and received help in securing Shane’s Rib Shack and Hwy 55 Burgers, both currently under construction.

  1. Create and foster relationships directly with businesses in your target retail niches.

Once you know what types of retailers, restaurants and service providers you want to pursue, start visiting businesses in those niches in the surrounding area.

Tell the business owners you meet about the retail spaces you have available. Ask if they might be interested, or if someone they know might be interested. In the process, you will learn more about what each type of business is looking for.

Knowing that we wanted a Mexican restaurant for our Belmont center, we knew that Cielo Mexican Grill had a number of locations in the Cobb/Cherokee market. We met with them at an existing location; they loved the concept for the center, and are now taking 4,000 square feet.

We have used this strategy again and again, and it works. Even if you don’t directly find a tenant, business owners talk to each other, and a referral may bring just the right prospect to you.

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Electronic marketing, such as having a quality website with an up-to-date list of available space along with good photos, is important in recruiting tenants, as are timely email blasts and personalized emails to targeted brokers, but don’t forget to include targeting of potential tenants based on your market research, followed by personal outreach. This will pay off.

Benjamin Halpern is a Leasing Agent for Atlanta-based Halpern Enterprises, which owns and manages 35 retail properties in Georgia, South Carolina, Florida and Tennessee. Halpern is continually expanding its retail portfolio, both through acquisitions and new development.

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