Sunday, January 26, 2014

Podcast 162 - Commercial Real Estate Training Audio

Here is our new 2014 podcast series. 3 topics for today. 1. How to brainstorm quality questions for clients, 2. Develop some real sales grit as an agent, 3. How to prepare for success as an agent in commercial real estate agent. Commercial real estate training audio by John Highman.

MP3 File

Friday, January 24, 2014

How to Do a Retail Shopping Center Survey of Shoppers

man walking in shopping center
Undertake a Shopping Center Survey to boost the tenant mix.

When you manage or lease a retail shopping center it is important to understand the shopping patterns of customers from within the local area.  By definition, the local area will be that the zone or precinct that produces 80% of the sales for your retailers; that area is likely to be local and within certain road boundaries or suburb precincts.

Within any period of 12 months there will be changes to seasonal shopping, customer demands, and shopper spending patterns.  That is where the customer survey process is of high value.  You can then match the property to the market and improve sales opportunities over all for the entire tenancy mix.

So the survey itself can help you make informed decisions when it comes to choice of retail tenant, solving vacancy problems, and improving customer interest within the property.  Ideally you want the customer to come back to the property frequently for their purchasing needs; that’s how you build sales and strengthen the tenant market rental.

Surveys of this type should be undertaken at least once every six months within any moderate to large retail shopping center.  The results of the survey can be merged into the business plan and tenant mix strategy for the property.

So here are some essential factors to understand when it comes to undertaking the survey and extracting valuable information from it:

  1. In most towns and cities there will be seasonal retail shopping patterns that are impacted by tourism, climate, local celebrations, and community demographics.  If you undertake the customer survey at the wrong time and within the timing of these local issues, the results that you achieve from the survey are likely to be biased and corrupted.  The best time to undertake a survey of retail customers and shopping center performance is during an ordinary business cycle.  Choose your timing carefully.  Any peaks in seasonal sales can then be regarded as a bonus to ordinary levels of customer interest and purchasing patterns.
  2. It is best practice with any retail shopper surveys to use a professional marketing firm that is experienced with retail properties of the type and location similar to yours.  They can bring valuable experience to the retail survey process and improve the results that you achieve.
  3. What stores are your customers visiting?  Some stores and retail categories will be more popular than others.  When you understand the sales peaks and customer preferences within the tenancy mix, you can place tenants more successfully and improve the clustering process.  That then has a direct impact on future sales and potentially market rental.  It also helps protect the tenancy mix from the pressures of an unsuccessful business.
  4. How often are people coming to your shopping center?  In a convenience based shopping center the number of visits per week can be quite high.  In comparison, the larger regional retail shopping Centre will be visited less frequently, however the time that the customer spends within the property will be lengthy and the amount of money spent will be higher per visit.  These are the averages that you need to understand.
  5. There are differences in shopping patterns when it comes to the typical male shopper verses the female shopper.  There are also differences in purchasing patterns between youth, young families, and middle aged and older shoppers.  Shoppers will come to the retail property for different reasons and on different days of the week.  You need to understand those reasons and the timing process.  You will find that retail shopping activities generally increase towards the end of any business week.  They can also be influenced by social security payment days.  This then requires you to analyze the local demographics when it comes to the typical shopper and the local community. 
  6. It is a valuable process to advise the tenants within the property of the survey before it starts and the reason for it.  They can then relate to the importance of the survey when it comes to optimizing the tenancy mix, improving sales, and choosing the correct levels of marketing for the property.

To work through these issues, it is necessary to establish a list of focused questions to be used by the people undertaking the survey.  Take the time to get the questions correctly balanced to your property, the location, and the customers.  In that way you will get some valuable information from the retail property survey.

You can get more tips for managing and leasing shopping centers at our main website 

Sunday, January 19, 2014

Shopping Centre Managers Know The Positive Power of a Shopping Centre Renovation

If you manage or lease a retail shopping centre, you will know that presentation is everything when it comes to attracting customers to the property and encouraging sales for tenants.  When the customer sees that the retail property is looking ‘tired’ or unclean, they start to find another property to visit and satisfy shopping needs.  A renovation strategy is therefore required for all good retail properties.

There is a fine balance between a shopping centre landlord, the tenants, and customers if you want to improve property performance; they are all stakeholders.  Each has a role to play in making a shopping centre successful.  Any weak links in the stakeholder relationship can destroy the tenant mix, the market rental, and the property performance.  The shopping centre manager is the ‘glue’ to hold the retail renovation or upgrade project together.

Here are some tips to ensure that a shopping centre makeover is successfully planned and implemented:

  1. Look at the conditions of the current retail property market and the local shopper demographics.  Is the property market slow or strong when it comes to retail spending and customer sentiment?  What is its future when you look at the typical customer?  How will your property satisfy that need and growth?
  2. Are there any pressures from other properties that are frustrating your progress and property performance now?  Can you address those pressures and reposition your property?
  3. Define the goals of your property upgrade.  What will the rental structure and lease profiles in the property look like after the renovation?  Will the capitalised increase in net rent improve the value of the property to the expectations of the landlord and the financiers?
  4. There will be limits as to the amount of money that should be spent on the property upgrade.  If you overspend, the whole ‘return on investment’ equation is threatened.
  5. Look at the leases to ensure that any threats to rental payments and lease occupancy are well understood before the project gets the final sign off to commence.
  6. After the renovation, what will be the factors of attraction for the property from both a tenant and customer perspective?  Compare those factors to the competing properties locally.  Look for strengths and weaknesses in each competing shopping centre.
  7. Gather a team of experts around you who can estimate accurately all of the variables in the renovation.  Those things will include rents, incentives, fees, advertising, marketing, tenant mix, relocation strategies, and lease documentation.

When you have the base information ready you can get estimates of the cost of the project and establish a time frame.  An informed landlord and shopping centre manager can make a property makeover plan a successful part of the retail property strategy.