A social approach to commercial leasing

14Jan09

While reading about a new mixed-use development in Chicago, I noticed an interesting statistic. The residential part of the complex was like 90% sold, but the commercial side seemed to only have one tenant. Even in a weak economy, this seems like a strange disconnect. If lots of people are already signed up to live right above those stores, why aren’t more businesses flocking to lease the space?

Obviously, there are other factors at work here. Maybe it’s the poor availability of business loans that prospective tenants need in order to open a new location. Or perhaps the landlord wants absurd rents for the space. Either way, the landlord seems to me missing out on a great way to lure more commercial tenants. Namely, just survey the people who are signed up to live in the adjoining buildings, or who already live very close to the vacant retail space. Ask them which stores, restaurants, and services they would like to have close by. And then use this data to seek out commercial tenants that fit the bill.

This strategy is great for everyone. Consumers get the types of retail businesses that they’ve been asking for, landlords are able to fill up their commercial space, and the new businesses that lease the space get a low-risk way to enter the market — since they’re addressing a documented consumer need. After thinking through the process, I’m amazed that commercial space is marketed any other way.



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