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The demand for retail space is expected to outpace construction this year despite the effect online shopping has had on brick and mortar retailing. There is a growing shift in investment money from larger shopping centers to community strip malls, and choosing just the right mix of tenants for these smaller retail sites can be the key to success.
Serving the Locale
Strip malls remain popular because they provide easy access to products consumers want every day. With a convenient location and an emphasis on local customers, strip malls continue to attract shoppers as well as landlords. In fact, strip malls account for more square footage than larger regional malls. There are over 100,000 strip malls across the country, including big community centers anchored by supermarkets, big box stores and discount stores; neighborhood centers featuring grocery or drug stores; and smaller shopping centers consisting only of convenience stores.
Updating the Strip Mall
A great location and a mix of convenience stores is just the beginning of the story for strip malls. Strip malls fill a basic consumer need, but in a changing world owners strive to position their retail centers as vibrant destinations designed to increase traffic. Entertainment and medical services like urgent care centers are popular additions, and some strip malls are becoming mixed-use with residential apartments. Integrating public transportation to make strip shopping centers more pedestrian-friendly is a common goal, and leasing space to tenants around a theme like families with children is a growing trend.
Attracting the Hottest Tenants
Providing an exciting experience for shoppers can draw consumers to your retail center, even though they have the means to buy at any time with the touch of an electronic device. According to Gain Property Management executive Clayton Kennedy, CPM/CCIM, choosing the right tenants can produce a lively mix. “The goal is to create synergy, where retailers complement one another and generate a strong feeling of excitement that can translate into increased sales for every tenant in the mall.”
Enticing restaurant concepts, alluring health and beauty shops and stylish fitness venues are all trending this year. Strip mall owners can attract the hottest tenants by focusing on the kind of high visual appeal that creates a desirable destination for shoppers and diners who frequent mall restaurants with friends after work and on the weekends.
There is no doubt about it, people love to socialize over a casual meal or a cup of coffee. In some cases, all it takes is a popular chain restaurant to anchor a strip mall to increase traffic that will trickle down to other merchants. Fast-food and casual restaurants are attracting an increasing number of customers, even more than full-service restaurants in many cases. The trend of creating a destination can be seen in upscale supermarkets that have added eat-in venues and wine bars.
- Health and Beauty
Who doesn’t want to be healthy and beautiful? In the right neighborhood, a strip mall with health and beauty retailers attract shoppers such as baby boomers who enjoy more disposable income. Consumers seeking an escape from a busy life enjoy pampering and are apt to take advantage of day spas offering everything from facials to specialty massages and waxing services and hair salons that have expanded to offer many of these services as well as hair services. Vitamin and organic health food stores also attract health conscious shoppers.
Where there is health and beauty, there is often fitness. Large gyms that offer equipment as well as classes along with smaller fitness centers continue to make their appearance in strip malls. Yoga and Pilates studios and barre fitness workout centers draw devoted followers who come for the exercise and stay at the strip mall for the food and shopping.
- Hunting for Treasures
Even in our improving economy, a large segment of the buying public remains devoted to bargain hunting. This trend is reflected in the tenant mix of retail centers. Discount, value-oriented and off-price retailers continue to drive retail center growth. Some value retailers emphasize the “treasure hunt” strategy by offering high end products mixed in with ever-changing value priced merchandise offerings.
- Upscale Retail
At the other end of the spectrum, upscale and luxury retail concepts are continuing to expand, especially in more heavily populated urban centers. Higher end retailers typically look for more experiential settings featuring more restaurants and entertainment.
Gain Property Management offers professional services to commercial and residential investors. We are a licensed and insured property management company offering full service and advanced technology self-management capabilities to provide flexibility to our clients.