In a retail mall, tenant mix analysis remains the most important part of property performance. When you get the tenant profiles and the mix well balanced, you can drive more sales to the property and strengthen the rent for the owner. It is an ‘equation’ of property performance, and must be adhered to.

In these times when retail and mall performance is under some pressure, it is essential that you do a property business plan once a year and bring key elements of activity and planning into that plan. Parts of that plan should include:

• Tenant mix analysis
• Tenant Combination Strategy
• Standard Leases
• anchor plugins
• Vacancy management plan
• vacancy marketing
• Income and expense analysis and benchmarks
• Customer profiles
• Sales records for retention segments
• Marketing strategies for the property.
• Owner Lifecycle Plans
• Tenant Retention Programs
• Capital investments and renovation initiatives
• Schedule maintenance
• Competitor Analysis

So let’s get back to the point of looking at tenant mix. Here are some ideas to help you get started with that.

1. What anchor tenants do you have on the property and how long do they have occupancy left? If your main tenant is important to the property and the combination (this is likely to be the case), you will need a renovation or replacement program to resolve any threat of vacancy.
2. Special tenants must be a good fit for the property and the buyer. Placement of specialty tenants should occur in ‘clusters’ that encourage sales and buyer attention. If a shopper buys products in one store, the adjacent stores should be complementary to potentially expand the sales potential of each shopper’s purchase.
3. Some of your tenants will be ‘destiny’ type. That means you’ll see people visit that store regardless of their location. A post office is a good example. In a mall, it’s good to have a few of these target tenants and distribute them to locations where they benefit the overall mix of tenants.
4. Look at the ‘permitted use’ as detailed in each of the tenants’ leases. For example, and when it comes to food courts, it is important to ensure that the ‘permitted uses’ and ‘exclusivities’ noted in each lease are respected. One of the most common problems in a food court is the sale and provision of ‘coffee’. If you have a major coffee shop retailer in the mall, you could be destroying your business by allowing all other retailers to sell coffee. That’s where a ‘permit use’ strategy comes in handy.

Taking all these aspects into account, you can plan the tenant mix and tenant profile in the property. Successful commercial property is all about strategy and planning. If you manage or lease a shopping center, it’s your job to recognize that fact and implement the plan.