The 2nd Annual Sacramento Strip Mall Conference was held this week. The conference was full of ways for retail property owners to make money. As your retail real estate expert, I will share a few of them.
1. Charge for your monument signage. Make the fee agreement an addendum to the lease. This gives you additional revenue, which increases the value of your real estate. It gives the tenant a way to advertise their business to every car and person that passes the site.
2. Monitor your tenants sales volume monthly. If you begin to see a trend emerge, as the property owner, you can step in to assist rather than wait until the tenant goes out of business. This right should be included in your lease.
3. Use your strip mall for fundraisers. This is a wonderful addition to the community. Since the residents are the ones who frequent your centers, give something back.
4. Charge for an exclusive from a small user. In some areas, there are many vacancies. If the tenant is desirable and brings value to the center, you may opt to give them an exclusive when they pay a higher lease rate.
5. Green construction will soon be mandatory. As you make improvements to your center, consider green construction. You will be ahead of the curve and bring value to your center.
6. Right now, there is a battle called mega grocery, cheap price vs. high experience, high price. As a result, some of the largest grocery chains find themselves in the dreaded "middle". To address the consumer need, many grocers are renovating their stores. If these chains are your tenants, be aware that once the renovations are complete, property owners are realizing significantly increased rents from those tenants at lease renewal.
7. Be cautious with new construction. Tenant driven retail is preferred over spec retail. Know who the retailers are that are looking to expand in your area and get into relationship with them.
8. There are 2 new categories in the "Structure of the Retail Market". They are "big box" at the top of the model (that is bigger than malls) and "convenience retail" at the bottom of the model. As our residential dwellings shift from single family homes to multi family (which includes high end condos), so does the need for retail. The convenience retail category will become the giant of the future.
9. If you are developing, know the process. it will go a long way toward getting your plan approved. Skipping a step in the process can really cost you.
10. The fundamentals in the Sacramento commercial real estate market are very good. Cap rates are increasing interest rates are still low. Some property owners are in trouble due to the shift in the market. This combination makes Sacramento real estate a great "buyers" market for the savvy investor. Work with an investment real estate broker who offers information, education and communication so you can capitalize on the "deals" that are available in today's market.
Comments(3)