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TOP 5 DEATHBED REGRETS OF A DYING MALL: Timid leasing (Series 3 of 5)

Timid

(tim·id)

adjective

  1. showing a lack of courage or confidence; easily frightened.
  2. characterized by or indicating fear.

 

Timid. Think about that word for a sec. I did before writing this post, and for the life of me, I cannot think of one great thing ever described of as “timid.” Seriously, ponder that word for a moment. Have you ever heard of a dynamic politician, educator or spiritual leader referred to as “timid?” No? How about a grand thought or idea? Me neither. A great athlete or sports franchise?” FUGGEDABOUTIT! Another thing, in my opinion, that should never be referred to as “timid” is retail leasing.

Dwight D. Eisenhower once said, “History does not long entrust the care of freedom to the weak or the timid.” I like this quote because it can be adapted to almost any situation. In the case of retail leasing, I imagine that it would go something like this: Retail does not long entrust the care of malls to the weak or the timid. The goal is to get shoppers into your mall, and in this day of the changing retail landscape, this goal can only be achieved by being bold and creative. So, consider the following non-timid solutions when selecting your mall’s tenant lineup:

  • TAKE A RISK ON A NEW RETAILER: Many mall owners are too focused on national tenants, and while national tenants do bring credit and are necessary, unique tenants can give a mall a point of difference. Don’t overlook the unique upstart retailer in a frantic search for the perfect national tenant lineup. Even if your center is distressed and short-term rent is critical, it may be worth thinking long-term, taking less rent and taking a chance on a new retailer. The end result may be more traffic driven to your center, which would put your center in a better overall position.
  • OFFER PERCENTAGE ONLY DEALS WITH FLOORS: Yes, your lenders want tenants with contracted rents, but in lieu of foregoing a percentage deal in its entirety, instead insert a floor caveat to make your lenders happy. This concept doesn’t need to be reserved for upstarts either. Identify one powerful national retailer you want to add to your mix (we call them Bell Cows) and offer this retailer a percentage only deal. It’s a win-win concept for all involved – the national retailer opens a new store with very little risk; you, the mall owner, get a great traffic generator; and your patrons have a new and exciting store in which to shop.
  • CONSIDER NON-TRADITIONAL RETAILERS: The goal is to drive traffic to your mall, right? So, why not add non-traditional uses? All too often I hear leasing people talk themselves out of adding non-traditional uses with phrases like, “What about my mix?” or “Long-term, how will this play out?” or “What will the other tenants think?” First of all, if you don’t act boldly now your center may not have a long-term future, so don’t be afraid to take a risk by adding a non-traditional retailer such as medical clinic or college. Secondly, we are operating in a new world of hybrid centers. Retailers have seen these centers work and are now less judgmental about the tenant lineup mix in malls. If adding a non-traditional use provides more traffic and the opportunity for the existing retailers to increase their sales, they will be supportive. 

Think about it like this . . . Much like the aforementioned educators, politicians and sports franchises whose goal is to get butts into seats anyway possible, the goal of today’s mall owner should be to get shoppers to their doors using any means possible. Who cares how you get them there?!  Add a startup or non-traditional retailer! Get creative with leasing deals! Be bold in your leasing decisions, and I promise you that you will not wish on your deathbed that you had been less timid about your retail leasing.

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