The retail commercial property leasing landscape is competitive and fast-changing. Coupled with a challenging macroeconomic climate, where tough decisions are being made like Macy’s announcement to close 150 underperforming mall stores over the next three years leaving behind empty anchor spaces, how can you as a commercial real estate (CRE) broker, help your retail clients thrive?
The answer lies in using innovative retail leasing strategies to help them attract and retain the best tenants.
What’s more, modern geographic information systems (GIS) tools are the perfect ally to help you devise and refine your tactics.
In this guide, we unpack five proven retail commercial property leasing strategies you can use with the help of GIS analytics. Read on to discover how technology can help rather than hinder.
How the Right GIS Tool Can Help You Create a Killer Retail Commercial Property Leasing Strategy
Your success in the retail sector depends on your ability to make quick and smart decisions for both you and your clients.
If you’ve been in this industry for a long time, you’ll surely have ways and methods of getting access to data.
But there’s no doubt that extracting meaningful insights using traditional methods is both a time-consuming and cumbersome process. Juggling multiple platforms or sources of information only adds to the frustration.
Modern GIS tools integrate various analytical features that illuminate opportunities and trends that might otherwise be overlooked. Perhaps you’ve tried out some GIS tools and found them lacking or difficult to use.
What you need is an intuitive, user-friendly platform that cuts down on the noise and gets you the best results fast. We’ve created AlphaMap, a CRE-specific, GIS-based location insights platform, precisely for brokers like you.
Whether it’s AlphaMap you choose or another tool, here are some features you should look out for to help simplify your workflow and improve your leasing strategies:
- User-friendly interface
- Comprehensive data integration
- Foot and car traffic insights
- Customizable reports and visualizations
- Predictive analytics
We’ll unpack how you can make use of these features below.
5 Retail Commercial Property Leasing Strategies to Help You Win in a Competitive Market
1. Identify Unique Selling Points and Craft a Compelling Property Story
The secret to standing out in a crowded market is to identify a property’s unique selling points (USPs).
AlphaMap’s simple, yet powerful, interface simplifies the navigation process, making it easy to quickly pinpoint what makes your property special.
Is the location unique? What kind of exceptional or unusual amenities does it offer? Is there a distinctive design that will benefit a specific type of tenant?
Communicate the benefits of these USPs clearly and show tenants how the USPs will solve common problems. Don’t underestimate the value of testimonials and success stories to build credibility. You can even personalize your approach by creating tailored leasing proposals.
Real-Life Example: Seaport District, Boston
The Seaport District in Boston used to be an industrial area but underwent extensive redevelopment in the early 2000s. These days, it is like a mini city on its own, with restaurants, hotels, art galleries, residential options, offices, a convention center, and a wide variety of shops. It is accessible through almost every mode of city transport, including water taxi.
Seaport leverages its unique history and location-driven advantages to tell a special story that attracts a specific kind of high-quality tenant. In fact, Seaport is fast becoming a sought-after spot for Fortune 500s and startups to set up a business. It’s also an in-demand residential area and popular tourist destination.
2. Develop a Data-Driven Marketing Strategy
GIS tools that integrate multiple data sources into a single platform enable you to gather and analyze demographic information, traffic patterns, competitor locations, and market trends.
This comprehensive overview supports the creation of a data-driven marketing strategy. You can also zero in on specific audience segments to develop targeted marketing campaigns. This can help you to create a marketing plan which includes vital information such as:
- Target audience
- Budget
- Marketing channels
Showcase the best qualities of your property with a strong digital footprint such as a property website and social media profiles featuring professional photography, videos, 3D tours, and interactive maps. These digital assets help to communicate a professional presence. They can also be optimized for SEO and used to improve visibility to drive leads from CRE portals. Segmented and targeted email campaigns are also a cost-effective strategy for engaging prospects and converting them into tenants.
You could even go old-school with your marketing by including print advertising such as billboards and flyers. These are great for handing out at networking events.
Real-Life Example: Fulton Market, Chicago
Fulton Market in Chicago showcases how a data-driven marketing strategy can revitalize an area and attract high-quality tenants. Initially known for its meatpacking plants and industrial warehouses, Fulton Market has transformed into one of Chicago's trendiest neighborhoods. It now features top-tier offices, retail spaces, and luxury apartments.
The strategic use of GIS data in various land use and demographic studies led to a successful repositioning of the Fulton Market.
High-profile companies like Google and McDonald’s Global Headquarters have since moved to the area. This invigorated local businesses and established the neighborhood as a prime commercial and retail destination.
3. Enhance Property Appeal with Quality Amenities
You can use a GIS tool to analyze population density, income levels, spending habits, and customer preferences to identify exactly which kinds of amenities to invest in for your retail center.
Amenities that enhance the shopping experience are popular additions. You might invest in free Wi-Fi, comfortable seating with charging stations, and energy-efficient, eco-friendly systems. Solar power and water-efficient features can reduce the operating costs for your tenants, increasing the attractiveness of the space.
Mixed-use spaces are an ideal way to increase foot traffic and add that little bit of extra oomph to your leasing strategies.
These could include:
- Retail and residential, e.g. buildings that have retail stores or restaurants on the ground floor and residential units above
- Office and retail, e.g. office buildings that incorporate retail spaces on the lower floors, benefiting both the office tenants and the public
- Entertainment and commercial, e.g. complexes that include entertainment venues such as theaters, along with commercial spaces such as restaurants and shops
Another way to better the retail experience for tenants and customers is to upgrade common areas. Outdoor or open-air shopping experiences are growing in popularity. You can make the most of this trend by refurbishing to incorporate some kind of open-air public space in your shopping mall. Introduce greenery and vibrant colors to inspire and attract shoppers.
Real-Life Example: The Shops & Restaurants at Hudson Yards, New York
Consider The Shops & Restaurants at Hudson Yards, part of the larger Hudson Yards development in Manhattan. Opened in 2019, Hudson Yards is a mixed-use development that includes retail, residential, office, and public spaces.
The Shops & Restaurants is a luxury shopping mall incorporating high-end retail, dining by celebrity chefs, and exclusive ‘insider’ events and experiences. The mall offers digital concierge shopping services, augmented reality experiences through a mobile app, high-speed Wi-Fi, and smart parking technology. It also features an outdoor sky deck called the Edge, occasional film screenings, and luxury fitness centers nearby. It is a prime example of how amenities can drive higher tenant retention in a retail precinct.
It’s also a great example of how retail tenants can benefit from the constant foot traffic generated by the mixed-use nature of a development.
4. Build Strong Relationships with Potential Tenants
Communication is the key to building and nurturing good tenant relationships. Maintain regular communication and follow-ups with prospective tenants. Personalize your outreach to address the needs of specific kinds of tenants – this shows that you value their uniqueness and are willing to accommodate their requirements. It’s an approach that can help you catch the big anchor tenants and high-end retail stores.
There is truth in the saying, “It’s not what you know, but who you know, that matters”. Use your network to spread the word about your property.
Host events and property tours to engage with leads. Ensure you personalize your property tours to highlight the features that cater to the tenant's business needs and demonstrate how your property stands out from the competition.
Partnering with local businesses and community organizations can also strengthen relationships.
4. Use TenantFinder™
Still, looking for those high-quality tenants and wondering where to find them? Make use of AlphaMap’s TenantFinder™ feature to populate a list of ideal tenants at lightning speed.
TenantFinder™ analyses location and market data to identify potential tenants whose needs match your property.
It generates a list of high-quality prospective tenants, providing contact information for easy communication. You can then reach out with personalized messages.
5. Negotiate Win-Win Lease Agreements
You’re about to sign on the dotted line with a new tenant. Is the lease agreement on the table something that promises to benefit both parties? The key to retaining high-end tenants is providing attractive incentives. You might offer rent-free or decreased-rent periods for new tenants, provide tenant improvement allowances that they can use for the interior fit-out, or offer flexible lease terms.
You can customize the lease terms to accommodate different tenant needs. GIS analytics can help you to align incentives with the preferences of your target market.
AlphaMap’s advanced predictive analytics can also be used to forecast trends and demand. Use these insights to adapt your leases to changing market conditions.
Real-Life Example: Easton Town Center, Columbus, Ohio
Easton Town Center is a mixed-use retail development that has become one of the premier shopping destinations in the Midwest. It incorporates shopping, dining, entertainment, and office spaces, creating a vibrant town center feel. It’s ranked among the top 30 highest-performing retail centers in the US.
Easton Town Center used an innovative mix of flexible leasing options, revenue-based rent, tenant improvement allowances, and strategic incentives to attract a diverse array of retailers that has ensured economic sustainability for the precinct.
Final Thoughts on the Importance of a Strong Retail Commercial Property Leasing Strategy
Strong retail commercial property leasing strategies are necessary but not needlessly complex. From identifying unique selling points, to using data-driven marketing and enhancing property appeal with quality amenities, the recipe for attracting and retaining top-quality tenants is straightforward.
In a market where adaptability and innovation are key, it's essential to take advantage of technology like GIS to refine your leasing strategies.
Why? Because it will increase the quality of the tenants you attract and streamline your workflows while helping you keep up with the latest market trends. By staying informed and proactive, retail property owners and CRE brokers can thrive in even the most competitive of environments.
