Leasing Malls and Shopping Centers – Find Tenants Faster

A shopping center is a special type of real estate investment that must be well managed and leased. It is very integrated into the community and customer service. If you don’t do that, then the property fails and the owner loses money. This is where lease management and tenant mix are critical to the success of a commercial property lease.

Poorly constructed leases and inexperienced tenants in a commercial property are like a cancer on property performance. You can drag the property back for years. Careful choices are required. So let’s take a look at that.

In a shopping center, the property manager must be forward-thinking and plan for the location and performance of the tenants. Vacancies should be minimized through robust lease management processes. It’s not unusual to be planning your leases and vacancies up to 2 years in advance. With retail property renovations and upgrades occurring frequently, lease administration and vacancy controls are critical.

In shopping centers, it is not unusual for landlords to avoid giving tenants options to renew for longer terms of occupancy. The reality is that a successful shopping center usually does not need to provide options to minimize vacancy. A successful shopping center would typically have a list of tenants waiting to enter the property.

Options for an additional period of occupancy only benefit the tenant and are, in most cases, offered by the landlord when the premises are difficult to lease. If you have to give an option to a tenant negotiating a lease at a successful mall, then make the option shorter and keep the window of time to exercise that option relatively short and far from the end of the lease. That way, the landlord can decide what to do if he has to find a new tenant.

Not all tenants will follow the property and the vacant area. Careful decisions must be made to keep the tenant mix working for the client, the property, and the owner. So, the rules for leasing vacant space in a shopping center include:

• Optimized rental income and tenant growth
• A lease term that does not expose the landlord to excessive vacancy throughout the property
• A balance for other tenants in the tenant mix
• Recovery of expenses related to the leasable area
• A quality tenant who supports the image of the property
• A tenant with a proven track record of success and service

Many prospective tenants will want to know about the tenant mix and lease expiration dates of the primary tenants in the property. They will also like to know about the levels of trade and the clients that visit the property on different days of the week.

You should expect prospective tenants who are considering moving into a retail property or shopping center to take the time to talk to the other tenants to see what they think about the property function, property management, and the landlord. That is the main reason for you to promote a well-performing property and happy tenants. Do this and your vacancies will be minimal.