Commercial real property owners should be flexible

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The decision of a business owner to move into a retail center or strip mall is based on many things, not the least of which is the relationship he establishes with the property's owner. If the property requires external remodeling or revision of interior spaces based on the new tenant's needs, an agreement can often be reached accommodating both parties.|ret||ret||tab|

"I would guess most investors and most owners of buildings are open to the fact that if the market is demanding another type of use for their particular space that they're open to some sort of retro-fit to create new space," said Ken Schwab, agent for Wilhoit Properties Inc. |ret||ret||tab|

On the other hand, if the property owner is willing to make changes, "it can create probably more difficulties because then you limit your market of what can go there," Schwab added.|ret||ret||tab|

For example, what does a lessor do with a truckload of kitchen equipment and related hardware when the business interested in leasing the space is not a restaurant? |ret||ret||tab|

This sort of space change is a worst-case scenario for property owners be-cause of the substantial interior infill in-volved, according to Sharon Ash, broker for ERA Jones-Rutherford.|ret||ret||tab|

"It's going to require cooperation be-tween the landlord and person wanting to occupy the business," Ash said.|ret||ret||tab|

"Both parties are going to have to co-operate and have some expense in re-habbing one when you've got that kind of major change," she said. Modifications of this sort often involve an agreement where the incoming business owner will become a long-term tenant, she added.|ret||ret||tab|

Sometimes changing a restaurant into something else, however, is the best use of a property. Schwab said consecutive restaurant failures at a given location can give it the "kiss of death" in the public's perception. |ret||ret||tab|

He noted one East Battlefield location that went from a seafood restaurant to a hamburger establishment, to an Italian restaurant before becoming Battlefield Station Family Hobbies.|ret||ret||tab|

Another way to renovate a restaurant property to suit new owners is more drastic. When the owners of Just For Feet bought The Bombay Bicycle Club at Battlefield and Delaware, they leveled it. |ret||ret||tab|

Ash said, "All they wanted was a piece of land. It was more cost effective just to bulldoze that down than trying to rehab it."|ret||ret||tab|

Commercial Real-tors are well aware how retail center de-sign and the development of out lots can impact space marketability. Sometimes there's a "functional obsolescence built in as something was going up," said Barbara Beyer, Beyer Commercial Real-tors, CCIM. In this scenario, a shopping center holding the bulk of leasable space is positioned deep in a lot and gets blocked from view by later structures that are built in the out-lot locations.|ret||ret||tab|

Beyer understands the needs of developers to maximize "every square foot of land," but said, "they can end up shooting themselves in the foot because a tenant depends on people being able to see into a shopping center development."|ret||ret||tab|

This is especially true of smaller businesses, like card or curio shops, set back behind more prominent buildings. If they "don't have any big tenant to draw you back there, it can be detrimental," Beyer said. She added that doctors' and dentists' offices, however, often don't re-quire the same visibility that smaller re-tail outlets do.|ret||ret||tab|

Schwab said in some retail outlets "the users in the center become more ser-vice businesses," such as insurance and title companies, health professionals or land-surveyors. These businesses, Schwab added, "are less of a retail nature but still require exposure to the public, and so they like that street access, shopping center-like location, rather than an office building."|ret||ret||tab|

The Shamrock Center and Savannah Square on South Campbell are two locations where retail stores and other service-oriented businesses are found together. "Both of those seem to be a decent mix of both retail and service-type businesses," Schwab said.|ret||ret||tab|

Savannah Square was called Tiffany Square when developer Bill Jester bought it, Schwab said. "He upgraded and improved the parking lot, improved the look of the center and gave it a new named," he added. He sees these modifications as positively affecting the perception people have of the center.[[In-content Ad]]