How to Approach a Retailer

LAS VEGAS-Developer/tenant negotiations have often been called “trench warfare,” and because an estimated one-quarter of all shopping center leases are either originated or signed at ICSC’s Spring Convention, the Las Vegas Convention Center could be called the trenches. How does a developer/owner get off on the right foot with a potential tenant, especially if it’s a first time deal?That was the topic of discussion at a workshop on the final day of Spring Convention 2005 on Wednesday. Moderator Gar Herring, EVP of the MG Herring Group of Dallas, who sits on the developer side of the table, said it’s a matter of “know before you go. Do your homework — experience a retailer’s merchandise and stores. Research their requirements and their store opening strategy.”In terms of location, “know where we are in relation to your site — use common sense,” added Doug Burr, real estate manager of Ralphs Grocery Co. of Los Angeles, one of three retailers on the panel. “Don’t just call us up blindly. There’s a lot of silliness out there.”"Go on the Internet to find out about us,” urged Jim Pye, regional director of real estate for Famous Footwear, Hoffman Estates, IL. “Look in the phone book, call a store manager and talk to them for five minutes. It’s easy to become knowledgeable.”And make sure you know about things like exclusives,” he continued. “Don’t pitch a site for a shoe store when there’s a sporting goods store on the property with an exclusive on footwear because they don’t want anybody else selling athletic footwear.”A key factor in all of this, panelists agreed, is to develop relationships. ‘Take advantage of the opportunities, go to trade association events, pick up business cards, socialize,” Herring urged.And “know your brokers,” added Scott Alvarez, regional real estate director for the Regis Corp., a Minnesota-based company that operates more than 11,000 beauty salons around the country. “We couldn’t survive without the brokers. There’s no way we could handle all of this.”What’s the best way for someone on the developer/owner side to contact a potential tenant? Pye prefers e-mail as the best approach for an initial contact. Alvarez, on the other hand, prefers hard copy — “e-mail gets lost in the shuffle. Besides, I consider the Internet to be the root of all evil,” he laughed.Burr, meanwhile, likes a combination, an e-mail, followed by a package in the mail and a follow-up phone call. And all three said they preferred summary information initially, with full information later.In any event, “make sure you find the right person to contact, whether it’s us or our broker,” Pye urged.Ultimately, however, “the best results are achieved with a face-to-face meeting,” Herring said. Asked what the goal of that meeting should be, Pye told developer/owners simply to “work out your angle.”"Get to the point,” Burr agreed. “Get to know people, and be ready to know what you want to accomplish.”And all three retailers urged everyone, developer/owners and tenants alike to “tell the truth,” Burr said. For owners especially, “be truthful about the rent. The information is out there, everybody knows it, and we know when your not telling the truth.”And in terms of follow-up, “time kills all deals,” Herring said, a reference to instances where the process drags on for too long a period. For Pye, one of the obstacles is “when the attorneys get involved. That can drag things out.”"Be persistent,” Burr said. “Be prepared to follow it all the way to the end.”Herring, finally, told attendees that “credibility is key. Reputation is essential to survive.” Alvarez, meanwhile, warned that, “there are some scavengers out there.”"Some people think that the Golden Rule means ‘gold rules’,” Pye concluded. “But what it really means is that you have to treat everyone with respect.”