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What type of tenants should I have in my retail plaza?

Updated: Dec 25, 2023

What type of tenants should I have in my retail plaza? This is a question often asked by most landlords of any kind of retail space that they have for rent. If you get the wrong tenants, then you may experience turnover, late rents, property destruction, and costly court costs.

With our 30+ years in the business of managing, leasing and owning retail plazas we have come up with a short list of pro tips to help you better select what kind of tenants you should accept when filling your vacant property lease spaces.

  1. Already Established Business - Ideally it would be preferable to find a tenant that has been in business for at least 5 years or more and that is now seeking a new location or to branch out. We have found that companies already in business tend to have a longer chance of staying power as a tenant. Also, with experienced occupants, as a landlord, you have to have to spend a lot less time teaching newbie tenants the ropes.

  2. Service Oriented Businesses - In recent years, we have found that higher end service oriented business like hair salons, nail technicians, doctors, dentists, chiropractors, and shipping stores are good pay tenants and have a tendency to stay longer than most other types of tenants. They also keep the premises looking really nice and rarely if ever cause any trouble.

  3. National Tenants - If you can get national tenants that own a franchise, these are usually good long term stable tenants that pay on time. However, you might have to contribute more money initially in regards to build out dollars and possible rent reductions in the short term. You may also have to cater more to them with regards to requests for this and that. In the end, though, a national tenant is a great tenant placement and will also add more value and resale worth to your plaza when you go to sell it.

  4. Tenants seeking 1,000- 2,000 Square Foot Space Sizes - The sweet spot in tenant space sizes seems to be between 1,000 to 2,000 square foot spaces. We estimate that 80-90% of all tenants are seeking this size range. If as the landlord you have the ability to partition your plaza in such a manner to yield tenant spaces in this square footage range, then you will likely be less vulnerable to having much longer vacancies. You will typically be able to turn the vacant spaces in this square footage range within 3-6 months.

We hope this helps you as a landlord and best of luck managing your retail plazas and tenants.

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Greg Arbutine

Alan Development Co-Owner

Invest in real estate with Alan Development!

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21 dic 2023
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Great advice!

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  Since 1992, Alan Development has been procuring land and developing  commercial, mixed-use and multi-family projects.    Our company also acquires existing buildings and turns them into viable income properties.   
We do projects completely on our own or partner with corporations, investors, lenders or private individuals.   
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