Managing shopping centers and other commercial properties

What is Base Rent?

The minimum rent as set forth in a lease also called minimum rent

Regional Mall

contain 400,000-800,000 SF usually serve a population of 150,000 to 300,000 ex. University mall

Community Center

- 25-40 ancillary tenants, range in size from 150,000-400,000 sf of GLA and require a population of 100,000-150,000 to sustain them

Neighborhood Center

- Usually have 15 to 25 small shops, and range from 30,000-150,000 SF and serve a population of 5,000-40,000

What two factors does the size of the trade area depend on?

1. Type of shopping center 2. Location of competition

Define "Ancillary Tennant":

A shopping center tenant that occupies a smaller space and a location that is secondary in relation to the anchor tenant.

Entertainment Center

Also known as theme or festival shopping centers, or specialty shopping centers. Vary in size from 150,000 to 500,000 SF require a population of 150,000 Ex. Ghirardelli Square and Pier 39 in San Francisco

What is a "Trade Area Analysis"?

An analysis of the geographic area form which shopping centers draw most of their customers. Also indicates the potential for a shopping center to succeed in a particular location

Why is Financial Integrity important?

An established company may be doing well but their parent company may be struggling and sell the company to raise funds Some novice retailers expect immediate success from the day they open; realistically, it can take from one to three years to gain the level of success expected

What is the big difference between Base Rent and Percentage Rent?

Percentage rent-retailers pay a portion of their sales revenue. It is generally based on gross annual sales. Percentage rent is usually paid in addition to base rent

How is leasable area measured for retail spaces?

Rents for retail space are based on the GLA of the individual spaces. Like office spaces, stores are usually rented as open shell space (or vanilla shell space).

What considerations do you take into effect with how to divide tenant space or merchandise?

The merchandise of the ancillary tenants should never clash with what the anchor tenants offer. A good tenant mix serves both destination and impulse shoppers and increases sales of the center as a whole

How is leasable area measured differently in retail than in office space?

Unlike the practice in office buildings, the tenant, not the owner is usually responsible for completing the interior beyond the shell stage

How is base rent calculated?

Usually calculated on a per-square-foot-per-year basis and is commonly stated in the lease as equal monthly incremental amounts.

Mega Mall

has over 800,000 to 3 million SF serves a population of 300,000 or more ex. Mall of American in Minnesota

Outlet Center

located in rural areas. Attract customers from 20-100 miles away. Require a minimum population of 200,000 has 50,000-400,000 SF

Power Center

range from 250,000-600,000 SF each anchor occupying 20,000 or more SF. Need a minimum population of 150,000

Lifestyle Center

represent upscale end of commercial development and often have a main street design ranging from 150,000-500,000 SF ex. Park city

What are some of the criteria for Retail Tenant selection?

• Retailer's reputation • Financial stability • Specific tenant requirements • Merchandise category and pricing • Tenant mix and placement