Ask anyone on our project leasing team in Minnesota what my favorite and most passionate phrase is and they’ll quote you the headline of this blog: There’s A Tenant for Every Space. For 30 years I’ve been focused on the landlord side of all transactions and our project leasing team operates under the same philosophy. As a “Project Team” member, brokers focus 100% of their time on landlord and property owner needs and results. With that kind of singular focus, each broker has the time, experience and feel to constantly walk the walk and talk the talk of our property owner clients.
With all of the retail property types that we work on, perhaps the most satisfying are those that have tended to be a problem for others to lease in our market. I’m talking about the non-anchored, older and out positioned neighborhood service/retail centers. Some can be well positioned but functionally obsolete in the eyes of many. Others can be out positioned by newer development within their neighborhood. Others can just simply be very old, needing a facelift or a tenant re-mix. All have the same thing in common: they have vacancy and they are difficult to lease. Most of these types tend to be locally owned assets with landlords looking for long-term cash flow solutions.
Our Project Team members have made great livings with these types of properties in their portfolios. They have experienced first-hand the fact that regardless of the property’s history, there really is “A Tenant for Every Space”. First they work with our property owner clients to establish and agree on understanding what the property is and how it fits within the market. With that, the next step is to agree on typical deal structures and level of credit most future tenants will have. Once everyone is in agreement, an aggressive marketing campaign can be set in motion that includes turning over as many rocks, knocking on as many doors and calling as many users as we can. The typical tenant will either be a relocation of an existing business or an incubation of a new business. If the property owner is willing to exercise a little flexibility and risk – which tends to be the case in most of these types – the property can usually be leased up.
Our most recent example of this is a well-positioned but physically functionally obsolete 84,000 square foot center in a second ring suburb of Minneapolis. The project was developed in the early 80’s with City Bond financing in which the city required an enclosed mall effect along with a second story office. With better positioned and more functionally designed competition popping up over the years, this center was approximately 30% leased with existing tenants paying percentage rent in an ugly terrarium effect mall at the front of each store. The 20,000 square foot second floor office space was empty and deteriorating. But the landlord had the flexibility necessary to allow us to implement a transformation program that focused on the most realistic tenant base and deal structures. After just two years, the center is currently 95% leased with a cash flow that has allowed the owner to de-mall and reface the entire project. There was also a free standing pad development opportunity that allowed a new three tenant, high rent structure development on the main corner. Today, the combination of the flexibility of this landlord and the digging, calling and meeting with prospects by our Project Leasing team has renewed this investment and added substantial value for our client.
The catalyst to this projects success is the team’s knowledge and belief that “There’s a Tenant for Every Space.” Without this base philosophy in place, our results would have been the same as those who tried leasing this project before us.
Douglas Sailor | Principal, Managing Partner
Mid-America Real Estate – Minnesota, LLC
5353 Wayzata Boulevard, Suite 650 | Minneapolis, MN. 55416
Direct: 952.563.6666 | Fax: 952.563.6633 | Mobile: 612.759.5700
firstname.lastname@example.org | www.midamericagrp.com