Curating the Perfect Tenant Mix: Building Spaces That Thrive
In the world of retail and mixed-use development, the phrase "location, location, location" only scratches the surface of success. Beyond prime real estate lies an equally vital consideration: curating the perfect tenant mix. A well-thought-out tenant strategy doesn't just fill vacancies—it builds a thriving ecosystem where businesses complement one another and align with the surrounding community. Here's how architects, urban planners, and large-scale developers approach this art and science.
The Importance of a Balanced Tenant Mix
A strong tenant mix creates synergy between businesses, enhances customer experiences, and drives long-term profitability for landlords. As Urban Land Institute (ULI) notes, “The goal is to curate a mix that adds value to the property and the community, creating a destination rather than just a space.”
By understanding consumer demographics, local trends, and the property’s unique identity, developers can curate tenants that create a seamless and enjoyable experience for visitors. For example:
An artisan bakery next to a boutique clothing store encourages cross-shopping.
Fitness centers paired with health-conscious cafes amplify a wellness-focused environment.
Key Principles for Identifying the Right Tenants
1. Understand the Community
Every successful tenant mix starts with a deep understanding of the local market. Architects like Robert Gibbs, known for his work in town center planning, emphasize analyzing demographics, foot traffic patterns, and spending behaviors. By tailoring the mix to the community, developers ensure the tenants serve actual needs while maintaining relevance.
Example: In creating The Grove in Los Angeles, developers curated a blend of national and local tenants, carefully aligned to the city’s vibrant, trend-focused culture. This approach has made it a top destination for residents and tourists alike.
2. Balance Local and National Brands
A mix of well-known national retailers and unique local businesses fosters an environment that appeals to diverse customer bases. According to ULI, “National brands provide the draw, while local tenants add authenticity and a sense of place.”
Case Study: Federal Realty Investment Trust, in projects like Bethesda Row, integrated beloved local businesses alongside national brands to create a community-centric shopping and dining experience.
3. Prioritize Tenant Synergy
Think of tenant curation like crafting a playlist—each addition should enhance the overall vibe. Placemaking expert Christopher Leinberger highlights the importance of tenant synergy, where complementary businesses naturally drive foot traffic to one another.
Pro Tip: Arrange tenants to encourage “spillover” effects. For instance, place coffee shops near bookstores or coworking spaces to create a natural flow of visitors.
Strategies to Attract Complementary Tenants
1. Market the Vision
Tenants are drawn to properties with a clear vision. Developers like Related Companies, creators of Hudson Yards, use storytelling to market their properties, positioning them as destinations rather than mere leasing opportunities.
2. Offer Flexible Lease Terms
Emerging brands may hesitate to commit to long-term leases. Flexible agreements, pop-up opportunities, and tiered rent structures help attract small businesses while reducing risks for property owners.
3. Leverage Design to Attract Tenants
Architects play a key role in tenant curation by designing spaces that appeal to desirable businesses. Features like ample natural light, flexible layouts, and outdoor dining options can make properties more attractive.
Example: The Pearl District in Portland features pedestrian-friendly layouts and design elements that naturally draw boutique retailers and food vendors, creating a cohesive, walkable community.
4. Build Relationships with Local Stakeholders
Collaborate with local chambers of commerce, business incubators, and tourism boards to identify businesses that align with the community’s needs. Engaging with local organizations not only strengthens tenant relationships but also builds goodwill.
Final Thoughts: Crafting Community Through Curation
Curating the perfect tenant mix isn’t just about filling spaces—it’s about creating a shared vision that benefits businesses, customers, and the community. By balancing local authenticity with national appeal, fostering tenant synergy, and designing spaces that attract diverse brands, developers can create destinations where people want to gather, shop, and linger.
As the Urban Land Institute aptly states, “A curated tenant mix is as much about storytelling as it is about strategy.” In every space lies an opportunity to tell a story, and with the right mix of tenants, that story becomes one of success, vibrancy, and connection.
References:
Urban Land Institute, Emerging Trends in Real Estate 2024
Robert Gibbs, Principles of Urban Retail Planning and Development
Federal Realty Investment Trust, Strategic Tenant Synergy
Related Companies, Hudson Yards Case Study
———————————————————————————————————————————————————————————————————————————
If you enjoyed reading this, check out…
· Big Box Stores Focus on Smaller, More Strategic Spaces
· Why Digitally Native Brands Need Brick and Mortar
Curious on how to strategize this holiday season to open your first or next brick-and-mortar location? The terra alma team is comprised of business space consultants. Based in Atlanta, we are experts on shopping, retail and accommodation opportunities to transition your business into the next phase of success. Contact our team today!