|
CONTINUED: Filling Vacant Retail Boxes Requires Thinking Outside The Box
<br />PARKING
<br />Hammond also said that Coreland is currently negotiating with a fitness center to open at the space of a
<br />former Jo-Ann Fabrics. "We have to get the existing grocery store (which has parking provisions against
<br />schools and gyms), as well as the city, to give us permission. We're having to perform a parking study to
<br />show there is enough parking to accommodate the additional traffic," he said. He added that its not
<br />uncommon for the same issues to arise when trying to sign a lease for a school or church.
<br />NEGOTIATING THE RIGHT LEASE TERM
<br />In many of these alternative-tenanting situations, a landlord is often "settling" for the tenant type, opting
<br />for the rental income over the ideal tenant. In that case, should a landlord negotiate shorter team leases
<br />in the hopes that the economy turns around and a more ideal tenant could be brought in?
<br />Both Hammond and Bemis said anchor spaces are typically signed for traditional five to 10-year terms.
<br />"With smaller tenants, we try and limit the terms to one to three years," said Hammond.
<br />"We're seeing a lot more willingness to accept shorter terms, kick-out clauses, etc," said Williams.
<br />PRACTICALITY OF CUTTING UP ANCHOR SPACES
<br />Gary Ralston, president of Florida Retail Development said, "Unfortunately, many large spaces are not
<br />easily divisible or conducive to being subdivided to meet the needs of the smaller retailer." He explained
<br />that vacant anchor spaces are often too long to be subdivided, and added that the likelihood of creating
<br />small shops in the front and getting a user for the back that doesn't require frontage is often times low.
<br />Supporting this challenge, Palumbo said a vacant anchor space at a shopping center she leases may need
<br />to be split up to lease part of the space to a national retailer, the balance of the space would then be
<br />limited in its traditional retail use, she's thinking medical use is a possibility.
<br />THINK OUTSIDE THE BOX
<br />"Creativity is very important now," stressed Bemis. As an example, Bemis cited JLL Retail's work on the
<br />Crestwood Court mall just outside of St. Louis. "Half of this center is getting redeveloped in a few years,
<br />but in the interim, about half of the space was vacant. We approached the arts community and were
<br />successful in turning that vacant space into an artisan community," said Bemis. At ArtSpace, local artisans
<br />rent space for studios where they can work on, display and sell their works; space for art classes, as well
<br />as live theatre is also on the premises. While ArtSpace was originally planned as a temporary use, Bemis
<br />said it's caught on in the community and is "keeping the mall very vital and interesting" and as a result,
<br />might be considered as part of the Crestwood's redevelopment plan.
<br />Ralston takes an analytic approach. "I suggest exploring the detailed demographic reports available. Take
<br />a look at the NAICS codes for retail and restaurant use and scrutinize each trade and its subsets in order
<br />to identify tenants. Then cross-reference that with demographic data on the categories where people
<br />spend their money [national per capita averages in comparison to the same in a certain radius of the
<br />subject property], to identify uses that are underserved in a certain geography."
<br />Meanwhile Williams said that calls coming in from their "for lease" signs are "down about 40% nationally, so now it's really important to use
<br />every avenue of advertising, as well as pounding the pavement and canvassing."
<br />To receive the full table, which includes over 200 retailers, email the editor, Sasha Pardy, at spardy@costar.com
<br />(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to Costar's Retail News Roundup, a weekly column
<br />covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers,
<br />personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the
<br />national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to lie
<br />added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to Costar's
<br />dedicated Retail RSS Feed.
<br />Copyright (c) 2009 Costar Realty Information, Inc. All rights reserved.
<br />
|