The Challenging Search for Local Tenants
For retail leasing agents and brokers, hunting for new tenants for their listings is a fundamental practice. It’s a time-consuming and difficult process to first understand the requirements and possible types of businesses that could fit into a vacancy, and then proceed to identify realistic candidates, before finally attempting to get in touch with them.
This process is made even more difficult when you are finding non-chain tenants. National chains have established real estate teams, known tenant rep brokers, and often published guidelines about their site criteria and expansion plans. Restaurants and retailers with fewer than 10 locations typically have none of that.
Nevertheless, retail real estate professionals have to find a way to fill these vacancies with qualified tenants if they want to earn a commission. So how do they respond to the challenge? By grinding. They may start out with a list of some known businesses in their market. Standard practice is to identify concepts that might work for your listing and spend an afternoon or entire day driving around, walking into businesses door-to-door, hoping the owner or decision maker is available and asking if they are planning to expand.
After devoting a massive amount of their time to this canvassing process, a broker or leasing agent may have a couple realistic opportunities to show for it. At this stage it is difficult to be picky about which businesses turn into leads, sometimes resulting in lower quality candidates for landlords to place in their centers. This leads shopping center owners to make a difficult decision to either continue the search with no revenue being collected for the vacant space or leasing to a lesser quality tenant, possibly eroding the property’s long-term value.
The entire retail canvassing process is long, challenging, and unoptimized. But it is the foundation of retail real estate for landlords and listing brokers. This process is described in greater detail in the ICSC publication, Canvassing 101.
The Resquared Local Tenant Recruiting platform was launched in 2020 to solve these problems. Now, leasing teams have instant access to information on thousands of local & regional retail concepts, including the strength of their brands, and have tools that simplify getting in touch with the business owners. All of this results in less time spent canvassing, more leads, and higher quality tenants.
CASE STUDY
Dustin Marks, Brokerage Vice President at Colliers International in Cincinnati, OH, began using the Resquared platform upon launch. He had a typical challenge in front of him: to find a tenant for a shopping center based in Northern Kentucky.
THE PROBLEM
The current tenants in the shopping center are primarily chain businesses. However, the vacancy (formerly occupied by Jerry’s Subs) does not meet the site criteria that most national chains require. Although Dustin shared details of this vacancy with national chains expanding in the area, he knew that this space would most likely be filled by a regional or local business.
As he studied the market and the characteristics of the property, he braced himself for the grind ahead. He would likely spend the better part of the next few weeks driving around, knocking on doors, and hoping that he could locate a few business owners that might be interested in relocating or expanding. To prepare for the project, he started to pull together what data he had access to for local businesses in Northern Kentucky and the greater Cincinnati area. He built a list of about 50 businesses that included some phone numbers he could call. This would be the starting point.
If only he had an easier way to gather information on all of the local businesses in the area and was able to contact them more efficiently.
THE SOLUTION
Dustin’s office had just begun a new subscription to Resquared’s Local Tenant Recruiting platform. On his next day in the office, he decided to check it out to see if it could be useful for his new leasing assignment.
He logged in and selected the location where his listing was located. Instantly, a list was populated with over 25,000 potential retail & restaurant tenant prospects within 30 miles of the shopping center that he could sort through. Not only was this directory considerably longer than any he had accessed before, but he didn’t have to spend days or weeks of his own time compiling the information.
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The next step was to qualify and narrow the list to something manageable. Typically, a leasing agent or broker would try to identify retail & restaurant categories that don’t exist in the center and perform searches one by one. Instead, Dustin began by using Resquared’s advanced search & filtering tools to remove any business categories from the list that were already operating within the center. This way, he could instantly see all non-competitive retailers & restaurants in the entire market and safely create his prospecting list from there.
He removed: discount stores, party supplies, beauty schools, furniture stores, office supplies, tax prep, banks, fried chicken restaurants, and dollar stores. He removed a few other types of businesses he didn’t think would be good fits for the vacancy and then he made sure to check the box for filtering out chain businesses. Lastly, he adjusted the radius search to only include businesses that were at least 5 miles away from the shopping center.
He was left with over 14,000 businesses. He scrolled through the results and found many to be great options for the shopping center. He couldn’t message all of them, so he needed to prioritize his efforts.
Instead of creating more filters to further narrow down the list, he sorted the list by the Resquared’s analytics-based “RE2 Score.” This is a measure, from 1-100, of how popular the business is based on review data. Usually, a broker wouldn’t spend the time to validate a prospect’s popularity before contacting them. But with this score, Dustin simply prioritized messaging the most popular businesses. Not only were they more likely to be interested in expanding, but the shopping center landlords and owners Dustin represented are thrilled if they can attract a highly rated tenant. The average retailer or restaurant has a 52 on the Resquared score scale. The prospects that Dustin reached out to had an average score of over 80.
He then began reaching out to the best prospects. With Resquared, it’s simple to send emails, make phone calls, or message businesses on Facebook with one or two clicks. If he were driving around and knocking on doors, it might take him an afternoon or entire day to talk to 25 businesses. Using Resquared, he could message 25 in less than 15 minutes. Not only is this process far faster, but reply rates from business owners on platforms like Facebook can be greater than 40%.
The next time he drove around to meet businesses in person, he wasn’t walking in cold, he used his list of addresses with all of the businesses he had already prospected and reached out to using Resquared.
SUMMARY
Dustin was able to sort through far more businesses than he ever had access to previously, prioritized reaching out to more popular businesses, and generated a high number of strong leads. Dustin concluded from his experience:
“Resquared is the most effective leasing tool I’ve come across in my 13 year career as a retail real estate broker. It has been a huge time-saver. Days of prospecting have been condensed into only a few hours, which allows me to identify the best options for my clients’ vacancies more efficiently.”
- Dustin Marks, Brokerage VP, Colliers International