How to Choose a Good Shopping Center Location

Retailers who seek new sites for their stores, or service shops should add the shopping center location to their lists of possible locations. When they do, however, they should be aware that the advantages of the shopping center for one type of retailing may be disadvantages for another.

The purpose of this Guide is to provide retailers with background information so that they can decide whether to locate their stores in shopping centers should such a decision be necessary. Among other things, it discusses the landlord-tenant relationship and the cost picture. Both of these factors are more complicated in shopping centers than in other locations.

Where you locate your store is one of your most important decisions. This fact is true whether you are opening a new store, starting a second outlet, or renewing your present lease. The problem is to find the right location for the right undertaking because a location can make or break a business.

Different stores have different locational requirements. You would not put a toy store in a retirement village or start a garden supply in a rental apartment house district. The customers you serve, the things they buy, the way they reach your store, the adjacent stores, and the neighborhood all bear upon the location. These factors must be related to the types and characteristics of shopping centers when you are considering a shopping center as a site.

Shopping Center Locations Characteristics

Shopping centers are distinctly different from the other two major locations - that is, downtown and local business strips. The shopping center building is pre-planned as a merchandising unit for interplay among tenants. Its site is deliberately selected by the developer for easy access to pull customers from a trade area. It has on-site parking as a common feature of the layout. The amount of parking space is directly related to the retail area.

Customers like the shopping center's convenience. They drive in, park, walk to their destination in relative safety and speed. Some shopping centers also provide weather protection and most provide an atmosphere created for shopping comfort. For the customer, the shopping center has great appeal.

For the merchant making a decision whether or not to locate in a shopping center, these "plus" characteristics must be related to the limitations placed upon you as a tenant. In a shopping center, a tenant is part of a merchant team. As such, you must pay your pro rata share of the budget for the team effort. You must keep store hours, light your windows, and place your signs within established rules.

What Are Your Chances of Finding a Good Shopping Center Location

Whether or not a small retailer can get into a particular shopping center depends on the market and management. A small shopping center may need only one children's shoe store, for example, while a regional center may expect enough business for several. The management aspect is simple to state: Developers and owners of shopping centers look for successful retailers.

In finding tenants whose line of goods will meet the needs of the desired market, the developer-owner first signs on a prestige merchant as the lead tenant. Then, the developer selects other types of stores that will complement each other. In this way, a "tenant mix" offers a varied array of merchandise. Thus, the center's competitive strength is bolstered against other centers as well as supplying the market area's needs.

To finance a center, the developer needs major leases from companies with strong credit ratings. The developer's own lenders favor tenant rosters that include the triple-A ratings of national chains. However, local merchants with good business records and proven understanding of the local markets have a good chance of being considered by a shopping center developer.

But even so, a small independent retailer can sometimes play "hard to get." When most spaces are filled, the developer may need you to help fill the rest of them.

If you are considering a shopping center for a first-store venture you may have trouble. Your financial backing and merchandising experience may be unproved to the owner-developer. Your problem is to convince the developer that the new store has a reasonable chance of success and will help the "tenant mix."

What Can the a Shopping Center Location Do for You?

Suppose that the owner-developer of a shopping center asks you to be a tenant. In considering the offer, you would need to make sure of what you can do in the center. What rules will there be on your operation? In exchange for the rules, what will the center do for you?

Even more important, you must consider the trade area, the location of your competition, and the location of your space in the center. These factors help to determine how much business you can expect to do in the center.

In a neighborhood shopping center, the leading tenant is a supermarket or drug store. The typical leasable space is 150,000 square feet but may range form 30,000 to 100,000 square feet. The typical site area is 10 to 30 acres. The minimum trade population is 2,500 to 40,000.

In a community shopping center, the leading tenant is a variety/junior department store or discount department store. The typical leasable space is 150,000 square feet but may range form 100,000 to 300,000 square feet. The typical site area is 10 to 30 acres. The minimum trade population is 40,000 to 150,000.

In a regional shopping center, the leading tenant is one or more full-line department stores. The typical leasable space is 400,000 square feet with a range from 300,000 to more than 1,000,000 square feet. They typical site area is 30 to 50 acres. The minimum trade population is 150,000 or more. When the regional center exceeds 750,000 square feet and includes three or more department stores, it becomes a SUPER-REGIONAL CENTER.

The Centers Location. In examining the center's location, look for answers to questions such as these:

Can you hold old customers and attract new ones?

Would the center offer the best sales volume potential for your kind of merchandise?

Can you benefit enough from the center's access to a market? If so, can you produce the appeal that will make the center's customers come to your store?

Can you deal with your logical competition?

Once you have decided what Kind of business you want to start and The investment requirements, you are ready to select a location.
The amount of competitive companies already in the region should affect your choice of location. Some areas are bombarded with
support stations or particular forms of restaurants. Check on the number of your type of business from Census figures, the yellow
pages, or by personally checking out the place.

Factors Aside from the Possible market, availability of Workers And number of aggressive businesses must be considered in choosing
a location. For instance, how adequate are utilities - sewer, water, power, gas? Parking facilities? Fire and fire protection?
What about housing and environmental factors like schools, cultural and community activities for employees? What is the average
price of this place in rents and taxes? Check on zoning regulations. Assess the business of the local business-people, the
aggressiveness of civic associations. In short, what is the city soul? Such aspects should give you a clue into the city or city's
future.

Chambers of Commerce and nearby universities usually have made or Are familiar with local polls that may provide answers to these
questions and the a number of other questions that will occur to you.

Next you have to decide in what part of city to find. If the city is Very small and you are establishing service or retail
business, there'll most likely be little choice. Just one shopping area is present. Cities have outlying shopping centers along
with the central shopping area, and shops spring up along principal thoroughfares and local streets.

Think about the shopping centre. It is different from different locations. The shopping centre building is pre-planned as a
merchandising unit. The site was deliberately selected by a programmer. On-site parking is a frequent feature. Customers may drive
in, park and do their buying in relative safety and speed. Some facilities offer weather protection. Such amenities make the
shopping centre an advantageous site.

Additionally, there are some limitations you should know about. As a tenant, You become a part of a retailer team and has to cover
your pro rata share of the budget. You must keep shop hours, light your windows, and place your signs based on established rules.
Many communities have restrictions on evidence along with the middle management may have additional limitations. Moreover, if you
are considering a shopping center for your first shop you may have an extra issue. Developers and owners of shopping centers start
looking for successful retailers.

The type and variety of merchandise that you carry helps determine the Type of purchasing area you select. By way of instance,
clothing shops, jewelry stores and department stores are more likely to be prosperous in shopping districts. On the other hand,
grocery stores, drug stores, filling stations, and bakeries do better on principal thoroughfares and local streets outside the
shopping districts. Some kinds of shops customarily pay a low rent per square foot, while others cover a high rent. At the"low"
category are furniture, grocery stores and hardware stores. At the"high" are cigar, drug, women's furnishings, and department
stores. There is not any hard and fast rule, however it's helpful to observe in which type of place a shop like yours often
appears to flourish.

After determining an area best suited to your type of business, Obtain as many details as possible about it. Check the
competition. How many similar businesses are located nearby? What does their sales volume appear to be? If you are establishing a
shop or support trade, how far is it that people come to trade in the region? Are the traffic patterns positive? If most of your
clients will be local populations, research the population trends of the region. Is population climbing, static or declining? Are
the people native-born, mixed or mostly foreign? Are new cultural groups coming in? Are they predominantly laborers, clerks,
executives or retired men? Are they all ages or principally retired, middle aged, or young? Judge purchasing power by checking
average home rental, typical property taxes, number of telephones, number of cars and, if the amount can be obtained, per capita
income. Bigger shopping facilities have this sort of information available, and will ensure it is available to serious prospective
tenants.

Zoning ordinances, parking availability, transport facilities And natural obstacles - such as hills and bridges - are all
important considerations in locating any sorts of business. Potential sources for this info are Chambers of Commerce, trade
associations, real estate businesses, local newspapers, banks, city officials, neighborhood merchants and personal monitoring. In
the event the Bureau of the Census has developed census tract information for the particular region where you are interested you
will find this especially valuable. A census tract is a small, permanently recognized, geographical area within a large city and
its environs. The Census Bureau provides population and housing characteristics for each tract. This information could be valuable
in measuring your market or service potential.

Choosing the actual site in a area may well be accepting what you May get. Very few buildings or plants will be appropriate and in
the exact same time, available. If you do have an option, be sure to weigh the possibilities carefully.

For a manufacturing plant, consider the condition and suitability Of the construction, transport, parking facilities, and the sort
of lease. For A store or service establishment, assess on the nearest competition, traffic Flow, parking amenities, road location,
physical aspects of the construction, Type of lease and cost, and the speed, cost and quality of transportation. Also Investigate
the history of the website. Find answers to such questions as: Has the Building remained vacant for any amount of time? Why? Have
various Kinds of Stores occupied it for short periods? It might have proved unprofitable for them. Sites on which many businesses
have failed ought to be avoided. Vacant buildings Do not bring traffic and are usually considered bad neighbors, therefore check
on nearby unoccupied buildings.