How to Curate the Perfect Power Center Tenant Mix

Curating the right tenant mix—one that drives traffic, creates and experience and is resistant to ecommerce shopping—is becoming one of the most important aspects of a successful power center. Power centers are generally known for big, national credit tenants, but today, more unique brands are making appearances. Vestar, an owner and operator of retail properties throughout Southern California and in Phoenix, frequently reviews its merchandise sales and fills in needs to produce the strongest tenant mix at its properties. We sat down with Taylor Alvey, VP of leasing at Vestar, to talk about how they are curating winning tenant mixes.

GlobeSt.com: How is the tenant mix at your lifestyle and power center changing?

Quality soft-good retail remains solid but the biggest evolution has been in the food, beverage, and entertainment categories.  Health, wellness, and entertainment are much more part of the daily routine than ever before and the consumer expects those categories at their shopping centers.  Farm-to-table, chef-driven, and/or local concepts are taking the place of many of the traditional chain restaurants.  Spinning, yoga, and pilates studios are much more part of the current mix than even five years ago.  These concepts bring something new to already successful centers and can breathe new life into tired ones.

GlobeSt.com: What are you doing to attract tenants and curate this tenant mix?

We are actively monitoring and analyzing the center’s overall merchandise mix.  A successful merchandise strategy is certainly not a “set it and forget it” strategy. We must constantly analyze what is working at our properties, what is not, and how that fits in with overall market trends in efforts to create a true sense of place.  If there is a void, who are the right tenants to target? If there is a problem area, how do we upgrade?  In addition, proactive space planning allows us to create a great merchandise mix.  Having the right size space available in an appropriate area of the center once you do have a void allows owners to create an optimal mix and traffic flow.

GlobeSt.com: You have a portfolio in markets throughout the Southwest. How much do demographics drive your tenants choices?

Demographics always play an integral role a tenants’ decision-making.  Every center we have is different and each attracts a diverse and unique tenant mix.  Our properties in a suburban, growing area usually appeal to a different tenant than our properties in more urban areas.  We are also becoming more strategic in how we analyze data by utilizing geo-fencing research. This strategy gives us the ability to better identify our shoppers and their habits. Owners that stay abreast with demographic shifts and patterns have the ability to create meaningful experiences at their centers.

GlobeSt.com: What types of tenants are expanding and most active in these centers?

The majority of the interest of late remains in the food/beverage, entertainment, and health/wellness categories. We are seeing interest across the board from both local tenants as well as franchise and national chains.  These are your healthier food options such as the fresh, farm-to-table concepts, poke, juice and smoothie bars, and reimagined soup and salad operations. On the entertainment side, the multi-attraction venues such as Punch Bowl Social and Dave and Busters continue to gain in popularity.  For health and wellness, we see the consumer trend of households having more than one fitness membership. This has led to an increase in spinning, yoga, barre, pilates, and meditation studios

GlobeSt.com: What do you expect power/lifestyle centers to be like in the next five years?

We strive to create a sense of place and provide a unique experience at each of our properties regardless of property-type. The consumer’s focus is on the experience now more than ever and not just on the weekends. They are working out in the morning, grabbing a coffee or a juice, and shopping all in the same trip. We see centers adding more amenities (as both merchandise offering and in aesthetics) throughout as well as creating a more pleasant atmosphere to accommodate this shift. We also see more office, residential, and hotel uses being incorporated into not only lifestyle centers but also into power centers.