How shopping center owners can fill big-box vacancies with non-traditional tenants.
The recession and its aftermath produced huge vacancies across the country and in a market where retailers have shrunk not only in numbers, but also in square footages, filling those vacancies remains a challenge. This environment means leasing agents need to think outside the box. Perhaps traditional retailers are hesitant to expand, but there are ample opportunities to fill space with non-traditional and short-term tenants that can add value to the asset and the community.
From churches to trade schools to medical facilities, these non-traditional tenants can help attract new visitors to retail properties, enliven a less-trafficked area and even create opportunities to cross-promote existing traditional tenants. For example, while University Mall in Chapel Hill, N.C. was undergoing renovations, we filled one of the vacancies with the public library. The library attracted 1,200 visitors per day to a traditionally low-traffic section of the enclosed mall. By getting creative and exploring prospects that we may not have targeted a few years ago, we engaged the community, increased traffic for all tenants and generated revenue for the mall.
Non-traditional tenants can also be positioned to feel more "traditional" by working with them to add a retail component where it makes sense. If leasing to a church, it could allocate space as a Christian bookstore concept. Others could sell relevant products — a cosmetic school could sell cosmetic and beauty products or a medical center could build out a pharmacy.
Regardless of the market, there are still opportunities to fill vacancies that add value. It takes creativity and strategic thinking to identify concepts that still meet the needs of the community, consumers and the asset as a whole even if they don't fit in that traditional retail box. The trick for leasing agents is to exploreevery possibility and ask yourself "why not" instead of "why."
— Denise Browning is senior vice president of leasing with Madison Marquette Retail Services. She is based in the company's Charlotte, N.C., office and can be reached at email@example.com.