Title: Mom-n-Pop Tenants
1. THE “TARGET” TENANTS WE SEEK
The kind of tenant we seek is an operator that contributes to the Center’s Intrinsic Value … its Loan Value.
2. WHAT THE APPROPRIATE TENANT DOES AND WANTS
Mom-and-Pop operators offer convenience style goods or services, and What They Want From Us is a Center that Attracts Customers for them.
3. SELECTING THE RIGHT TENANT FOR THE TENANT MIX TO DRAW CUSTOMERS.
These merchants may have everything at stake, often investing their lives and financial worth in the business;
What they lack in size and sophistication, they often make up for in hard work and a drive to see their business succeed.
For Example, pair a bike shop with a children’s clothing store, a nail salon by a hair studio.
4. HOW TO IDENTIFY POTENTIALLY SUCCESSFUL LOCAL TENANTS:
4.1 Evaluating their financial profiles and assessing their future business prospects.
4.1.1. How long are they in business? Watch out for poorly financed “start-up” businesses.
4.1.2. Annual Sales Volume on both a Gross and per-square foot basis? What are rates of Sales Increases?
4.1.3. Who are their Target customers and what is their perceived trade areas?
4.1.4. Pricing strategies for merchandise or services?
4.1.5. What are gross and/or net profit margins?
4.1.6. Markdown policy for slow selling merchandise?
4.1.7. How much is spent on advertising and where … what type of advertising?
184.108.40.206. The Tenant’s response to these questions serves a dual purpose:
220.127.116.11.1. to create an objective assessment of the tenant’s potential value and
18.104.22.168.2. to spark a dialogue that will provide insight into the tenants’ overall sophistication.
4.2 Assess the Soundness of the Business Plan.
4.3 Obtain a Personal Credit History
4.4 Obtain a list of both Personal and Professional References.
5. OUR MINIMUM EXPECTATIONS FOR A POTENTIAL TENANT INCLUDES THAT THE TENANT:
pays rent and other charges “on time”
abides by the lease requirements
maintains an attractive, well stocked store
strives for expanding sales
understands that advertising & marketing result in sales gains
tracks and compares sales and profit performance numbers
6. CULTIVATING A RELATIONSHIP
Structuring the Mom-&-Pop lease, probably will be alone & without a broker. The store owner is the decision maker and On-Site Manager.
Developing ongoing rapport can be critical in maintaining both financial and aesthetic vibrancy of a store.
7. RECOGNIZING THE TENANT IN TROUBLE
Mom-&-Pop operations are marginally capitalized and usually operate on a Thin Safety Net, unexpected or prolonged downturn may lead to failure or insolvency.
8. STRUGGLING TENANT WARNING SIGNS
changes in rental payment pattern
declining sales figures
poor maintenance and store upkeep
elimination of advertising and marketing
personal observation and rumors
9. OBJECTIVE OF THE WORKOUT IS EITHER:
A Quickly Revived Tenant capable to paying Market Rent in the Near Future, or
a Quick, Accomodating Return of the lease space to “For Rent” status.
Author Unknown, contributed by Sam and refined by Robert Jorrie