ATLANTA—With the shopping center world is experiencing a shaking—Credit Suisse predicts 25% of shopping centers will fold by 2010—savvy landlords are taking a closer look at the retail tenants they agree to bring into the fold. Retailers should always ask strategic questions.
Cary Beale, senior vice president of Retail Agency Leasing at Franklin Street, shared two of those questions in part one of our exclusive interview. In part two, he dives a little deeper.
GlobeSt.com: What are the retailer's build-out costs?
Beale: Shopping centers have become a riskier investment, making it a less welcoming environment for retail startups. Asking prospective tenants for their estimated build-out costs offers one way to assess their experience in the market.
Many of these new startup businesses don't know what the startup cost is, and they evaluate it to be much less than their actual cost. If they are opening a restaurant and they say it is $100,000, and you have built 30 of these and they are actually $300,000 to $500,000, the tenant doesn't really have its heads wrapped around what it's doing.
Prospective tenants willing to spend more, and who have the financing to do so, could prove that they are willing to invest in the success of the center. It shows the landlord that they are going to fight to succeed.
GlobeSt.com: Does the retailer have multiple locations?
Beale: Another bellwether for potential retailer success is whether the concept already has multiple locations. For a landlord, bringing in a tenant with multiple locations is exciting and we know they have a good record in the past, they are already a proven concept.
Landlords can also use a shopping center to debut an internationally successful brand. At the Santa Anita mall in California, Taiwanese menswear brand Simple, Style, Trend & Casual Life, or SST&C, opened its first US store. The store caters to the large demographic of Asian families living in the area.
(Find out why some retailers are thriving despite Amazon's growing influence.)
ATLANTA—With the shopping center world is experiencing a shaking—Credit Suisse predicts 25% of shopping centers will fold by 2010—savvy landlords are taking a closer look at the retail tenants they agree to bring into the fold. Retailers should always ask strategic questions.
Cary Beale, senior vice president of Retail Agency Leasing at Franklin Street, shared two of those questions in part one of our exclusive interview. In part two, he dives a little deeper.
GlobeSt.com: What are the retailer's build-out costs?
Beale: Shopping centers have become a riskier investment, making it a less welcoming environment for retail startups. Asking prospective tenants for their estimated build-out costs offers one way to assess their experience in the market.
Many of these new startup businesses don't know what the startup cost is, and they evaluate it to be much less than their actual cost. If they are opening a restaurant and they say it is $100,000, and you have built 30 of these and they are actually $300,000 to $500,000, the tenant doesn't really have its heads wrapped around what it's doing.
Prospective tenants willing to spend more, and who have the financing to do so, could prove that they are willing to invest in the success of the center. It shows the landlord that they are going to fight to succeed.
GlobeSt.com: Does the retailer have multiple locations?
Beale: Another bellwether for potential retailer success is whether the concept already has multiple locations. For a landlord, bringing in a tenant with multiple locations is exciting and we know they have a good record in the past, they are already a proven concept.
Landlords can also use a shopping center to debut an internationally successful brand. At the Santa Anita mall in California, Taiwanese menswear brand Simple, Style, Trend & Casual Life, or SST&C, opened its first US store. The store caters to the large demographic of Asian families living in the area.
(Find out why some retailers are thriving despite Amazon's growing influence.)
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