The most important step in keeping your shopping centre or mall occupied is realising the total economic impact of having to re-lease the space.
Consider the effect should one of your tenants go out of business:
- Can you find a replacement tenant?
- If so, how long will it take?
- Will you be able to achieve anywhere close to similar rental from a new tenant?
- What will legal fees cost you, if you choose to go after the old tenant for leasehold performance?
- What will leasing commissions for a new tenant cost you?
- What will tenant improvements cost, plus an inevitable period of free rent?
Unless you have awfully deep pockets, you can’t afford substantial vacancy in your centre – so you can’t afford to ignore your tenants’ concerns.
- Be willing to listen to their concerns. Tenant feedback can be most helpful.
- Work on a new promotional campaign – with tenant input.
- Does the centre need repairs? Paint or landscaping, for example? Consider the costs of repairs versus the cost of re-leasing should several tenants decide to leave.
- Always search for ways to improve your centre. Strive to achieve the most dynamic tenant mix. If a tenant vacates, work hard to improve that space with a promotional tenant who will help the rest of the centre.
- Finally, know your competition. If your centre is not competitive with those in the surrounding area and your centre management responds with complacency, the centre is doomed to failure.