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Posted in Real Estate

Retail Property Managers: Why A Tenant Mix Strategy Is So Important

A tenant mix analysis should be performed regularly on any commercial property and, on that basis, at least every 6 months as part of the property’s commercial plan. This way, you can see things tracked for tenants, anchor tenants, and clients of the property. Early identification of mix problems can help you prevent larger problems on the property over time.

Since a commercial property is driven by sales and customer interest, the mix of tenants will be very important in your annual commercial property plan. When you establish the right strategies for the mix, you can market the property to the client base and the local community, thus strengthening the sales results for everyone involved.

The success and performance of a commercial property is closely related to the success of the tenants. A successful commercial property will generally have consistently low vacancy factors and good market rents, even in the toughest retail cycles and real estate markets.

A professional and experienced retail center manager will have their ‘finger on the pulse’ when it comes to tenant mix. They will take into account the plans and changes that allow the property to be improved. Both the owner and the tenants of the property get positive results with their vested interests.

Here are the top reasons why you need to focus on tenant mix and get it right.

  1. The low vacancy rates will be evident on the property. Tenants will not want to leave because they know they are participating in a property where the owner and property manager are truly shaping the property in a positive way.
  2. Higher market rents will be achieved as the property is performing better than nearby competing properties. That will then spill over to a higher property value for the owner.
  3. With existing tenants, your renewals will be less complicated and negotiations will be easier. Tenants really don’t want to move out of the property and lose their income or business stability.
  4. Rent revisions on the property will be easier to negotiate since you will have many other ‘market rent comparables’ to use on and from the same property. It will make it more difficult for disputes or disagreements about rents to be justified or discussed.
  5. A good mix of tenants will give you the ability to move tenants around and put them in better positions when the opportunity arises.
  6. Renovation strategies and relocation strategies can be incorporated into lease negotiations, making it easy for you to shape the property and mix at the right time in the future.

When you focus your efforts on the tenant mix for your property, you can create a better financial outcome for both tenants and owners. Use the above factors as part of a checklist to shape the tenants and negotiations you undertake.

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