A Word to Landlords
In case you simply aren't paying attention to your own business, which I submit a number of you aren't, let me break this to you: Everything is overbuilt. Office space class A through Z, retail, office-retail, warehouse, light industrial, manufacturing, name it, there is more of it than there are folks who can afford to lease it. So if you think your little strip mall is some special snowflake, think again. Retail is really bad. Anchors are going dark everywhere, and the little guys who depend on the anchors for traffic are following them into the ground. This is not the time to jerk tenants around.
But some of you haven't gotten the memo. There is a strip mall near where I live that has a visibility problem. Most of the spaces in the mall can not be seen from the street. That includes the restaurant space. All retail depends to some extent on passing eyeballs, and restaurants die without them. The prior restaurant in this space avoided dying by moving to the west side with lower rent, higher traffic, and much better visibility. I don't know if the current one will make it that long. One thing is certain: The landlord is not helping. No extra signage or anything. It's a recipe for high turnover, and that can't be good business.
Then there is the Reams plaza in the neighborhood (Reams doesn't own it, it just anchors it along with Rite-Aid, with Walgreen's on its own pad.). For those keeping score, the west end has to be 60% vacant. The east end has at least two vacancies and will soon get more. Reason? Lease hikes. In this market. At least two of the former west end tenants relocated to more reasonable space, because there is plenty of it. At least one of the east end tenants is about to do the same. Nonanchor space will be at 50% for the new year. I hope they have sweet deals from the anchors, because that's all the revenue there is, but knowing Reams and the pharmacies, I doubt it. Makes you wonder what sort of business planning goes on at the landlord's headquarters.