Small businesses shake up the mix at local malls
When a 4,000-square-foot space opened up at Town Center Corte Madera, an open-air shopping center near San Francisco, Colliers International had a choice. The brokerage firm could seek out another large tenant to fill the space, or divide it into two less-expensive locations that would be friendlier to small businesses.
After parsing through sales data and noticing a spurt in small-business revenue, Colliers opted to split the space in two, leasing out one half to a local salad and sandwich joint. Since opening at the center in 2013, that San Francisco-based restaurant's sales per square foot have increased 5 percent annually, to $1,800 a square foot.
"They're performing far stronger than a restaurant tenant that we have there in 5,000 square feet that's national," said Anjee Solanki, national director of USA retail services at Colliers.
The Corte Madera property is not alone. With sales growth at small-business retailers outpacing that of their larger competitors nearly every month over the past four years, landlords are looking more favorably at mom-and-pop tenants than in the past.
But the benefits go beyond a potential sales lift. As shopping centers seek to differentiate themselves from neighboring properties — and drum up traffic in an increasingly digital world — adding small businesses to the mix is an easy way for property owners to accomplish both goals.
Kimco, the largest publicly traded owner and operator of open-air shopping centers in North America, has expanded a program that offers small businesses one year of free rent and reduced property charges. Originally started in California four years ago, it has since been expanded to 19 states.