Why SPEND Money on Something That Doesn’t MAKE Money?

The answer is that sometimes money isn’t the only thing that matters. Sometimes what matters is a city. A community. A neighborhood.

It’s an investment. I’m sure you of all people understands investments. Investments are those things that not everybody buys into. Some are quick and some are just – a little bit – sometimes – sssssllllllooooower. Actually, good investments are the ones most people don’t believe in, because it means though there may be higher chance of failure, there is great reward.

The real guessing game is investing in people. This is just what a nonprofit company here in Southwest Florida recently did with a nearby neighborhood. Seeing their city beginning to implode due to the lack of natural leadership and healthy morality, the company decided to invest. When the odds were stacked against this neighborhood, the company went all in.

Most people know Da Vinci’s painting The Last Supper, but few have seen this image or know the meaning behind the strange group gathered in a fast food restaurant. The Modern Last Supper’s subtitle, “Eat Every Supper As If It Were The Last”, encourages people to live with a purpose: Live with purpose and on purpose. Too many people live not planning for the future, then are staggered when surprises come. They react instead of proact.

But how does this relate for owners and landlords? Honestly, it may not. It’s a choice. Because if money always IS the most important thing for you, then this post likely has no takeaways for you. BUT, if you’re willing to believe in the power of people – That just one person can make another person’s day more meaningful – That kindness can be shown through more ways than a happy meal – then maybe it planted a seed. And maybe just maybe that seed grows into a tree, which produces fruit, and that fruit can make someone’s day better.

modern last supper
Real life modern last supper
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How to Achieve the Best Tenant Mix for Your Shopping Center

9. How to Achieve the Best Tenant Mix For Your Shopping CenterYou’re a pretty bright person, so don’t worry, I won’t waste your time explaining how to mix tenants together to get that perfect mix of attraction and collection retail stores. Unless you twist my arm JUST right, then I may have to let go of the goods.

Okay fine. Bottom line here is that I’ll basically be talking out loud to you – and I want you to know the whole time that you shouldn’t have to worry about this. This is the job of the leasing agents for your center, and there is much more to successful leasing agents than market knowledge… but, in case you’re curious what goes on in their minds:

1. Start with Your Anchor Tenant(s)

Anchor means that the tenant is preferred, typically national meaning they have stores in multiple states – it also means they likely sign a longer lease and occupy more space within the center than other tenants. Here in Florida, most of the time we see this being Publix, Whole Foods, and Walmart anchored centers for the Grocery side of things. It also may means that, when people give directions to your center, they say “next to the Publix” or “across from the Whole Foods on the corner of A and B street”.

While Grocery tenants are great, they’re not the only option. Leasing agents also consider Entertainment (Game Time, Movie Theatres, Bowling Alleys), Fitness Centers (LA Fitness, Snap, Crunch, CrossFit gyms), Dining (Italian, Pizza, American, Steak, Fish, Bar & Grill), Financial options (Bank of America, Lake Michigan Credit Union, Chase) and Specialty tenants. The fun comes in laying out the mall just so, making it easy for customers to get to and from places while simultaneously pulling them in to make additional purchases.

2.  Create a Cluster

And that’s when you get into clusters. It’s when leasing agents make a seating chart of stores based on their relevance to one another (for example, their target demographic). The idea is creating ‘zones’ of customer activity to increase sales. All this happens because once customers start buying in one place, they’re likely to make another purchase soon – seriously, like the store next door. By making these clusters, it facilitates this behavior and tenants can complement each other.

Example Cluster 1:

Buffalo Wild Wings

Ross Dress for Less

Five Below

Regal Movie Theater

*This example provides sports-centered dining for the family, retail shopping, discount shopping, and family entertainment.

Example Cluster 2:

Starbucks

Target

uBreakiFix

Panera Bread

*Slightly different than example 1, this variation offers multiple specialty tenants paired with one mass retail/grocery store and one franchise restaurant.

3. Specialty Tenants

Once a cluster is established, introducing specialty tenants encourages customers to stick around and spend more money. Sometimes, you might get a franchise tenant who has already convinced a customer base to get loyal, stick around, and spend more money. This is helpful because your mall can ride the coat tails of the successful. However, it’s important to recognize the obvious strengths (Dunkin Donuts, CVS, Dental Office) and less obvious weaknesses of adding certain tenants (Massage Parlors, Vape Stores, and Pawn Shops).
In the end, your shopping center is going to achieve the best results by curating the perfect collection of tenants and credit.  The best way to achieve this is to employ a seasoned retail leasing team with a strong track record for success in the local area.  They will have the market knowledge, tenant relationships, experience, strategy and skills required to execute the plan and maximize the return on your investment(ROI).  You may have thought this article would solve all your problems, and while for some it may, it won’t implement the solutions for you.

Trash Talk

8. Wanna Hear Some TrashHere in Florida, proper upkeep of trash corrals is very important for many important safety reasons. The following are some general tips for you as the landlord, or they may also be slightly adapted for use in communication with tenants.

  1. Pests

    – Enclosing the area is recommended especially in locations known to have large populations of pests. Some landlords have spoken up about this extra added cost in build out, but by having a dedicated space for trash as well as having it walled in, pests are further deterred from the trash due to natural pest control. Think of it from their perspective – your corral is the Great Wall of China and those pests are the Mongolians you’re looking to keep out!

  2. Positive Customer Experience

    – Especially in retail, maintain a safe and attractive environment for your customers so that they’ll want to return. You should secure anything, like poles or pallets or even chairs on patios, that could be used as a ladder providing access to the roof, or as projectiles breaking glass in order to gain access to the building.

  3. Crime Prevention & Draining

    – Corral doors should be kept closed and locked when the trash company doesn’t need access. This will help prevent illegal usage and suspicious activity from taking place. You may note some dumpster corrals have a small opening within the walls of the corral. This helps local safety enforcement be able to see through to the inside of the corral while also providing natural draining. Draining is very important especially here in Florida and during the rainy season, so that the amount of standing water (and therefore bugs) is reduced.

For a few professional tips about your dumpster, I went to the professionals of Waste Management.

  • Make sure your dumpster lids can close or else they’ll be left on site
  • To reduce odor, bag all trash. This helps reduce bacteria buildup, smell, and insects. If for some reasons your bags get punctured on the way out to the dumpster, re-bag them.
  • Keep it clean. Regularly clean out your dumpster and the surrounding corral area. There are various types of bleach and sprinkle granule applications you can buy.

Phew, that’s a lot of information, I know! But, let’s be honest, we all have trash every day, so taking care of that trash in the most effective manner saves everyone time and money, PLUS it could be the reason you have return customers.

Florida’s Funkiest Law Could Save You Thousands!

7. Florida_s Funkiest Law Could Save You Thousands!Walt Disney World saves millions in tax savings because it has cattle grazing on its grassy acreage. And did you know that SeaWorld and Universal theme parks in Orlando are now in the pine tree growing business? What? Thanks to one of Florida’s most outdated laws affectionately called Florida’s Rent-a-cow law, this 1959 law is allowing developers to take advantage of rules initially created to help farmers not be seduced by the price their land could bring if they sold during the ‘building boom.’ But Florida’s Greenbelt tax break is no longer just for farms. In fact, developers are the largest recipients of these breaks, encouraged to “buy large tracts for cheap knowing they can pay rock-bottom property tax indefinitely through token efforts at farming or ranching.”

If you try to save money like this, I have to warn you… if you rent or purchase cows, they’re staying for a looong time. And not just for supper! As they say, with tax breaks comes smelly yards. If you decide to sell the land or change its purpose, it’s your responsibility as the owner to notify the tax assessors of the change, or else you may pay penalties for your property with back assessment. One nice thing is that once you achieve Greenbelt status, your home or property will be grandfathered in the following year. However as another warning, your property will be assessed at least once every 5 years after the initial inspection.

For those of you who don’t feel like becoming Farmer Bob overnight, here are 3 realistic ways your property tax can be lowered.

  • Request Your Property Tax Card – And Study It!

Properties are appraised annually, and you only have a limited time to appeal an increase in your real estate taxes. Few owners realize they can go in person or, depending on the district, online, to request a copy of the assessment of your property. These typically include the size of your lot and information regarding the number of spaces constructed within your building. So if you realize a mistake has been made and it costs you money, let them know or you may miss your deadline, costing you thousands.

  • Extension

Each year you can request to have payments lowered or payment plan extended to make property tax more affordable – on YOUR timeline. I know here in Florida we have ‘seasons’ where the shopping is like the weather – heavenly. But then during off-season, people shop less or simply leave the sate. That messes with revenue which hurts if you’re stuck with a hefty tax assessment. HOWEVER listen up: if you choose to extend, you’re not getting the extra breathing room for free. It’s a loan sometimes with high rates. My suggestion to everyone is to pay your taxes as early as you can. In most states, this saves your 4% off the total due. In fact, we once had a very busy property owner who, unbeknownst to them, missed that discount every year for 5 years and lost out on over $50,000 in savings!

  • Homestead

By claiming homestead on your primary residence, your Property Appraiser will reduce property tax for all homeowners by sheltering a certain amount of a home’s value from tax. For example, this may mean that a $2 million home is now assessed at 10% less its assessment, or $200,000. A less valuable home – whether it was assessed low because of homestead or because it does not have curb appeal – will mean you pay less in taxes. OH, and the presence of a home doesn’t mean you can’t have adjacent land being classified for agricultural purposes (shout out to the ‘rent a cow program’ from earlier).

Whether you’re a first time home owner or a veteran developer, saving the most money on your property tax means more money in your pocket, for longer. If changing into Farmer Bob overnight has your name written all over it, then carefully proceed. But if you’re more like me, then the best advice is to always pay your property tax in November for the highest discount!

 

The Key to Excellence (Take the Shot!)

Success isn’t a destination, it’s a journey – And most of the time, it’s long and it’s painful. Because even when we think we know everything, we don’t. It takes change for us to get even a little bit better. But don’t just take it from me… take it from basketball legend Michael Jordan:

“I have missed more than 9,000 shots in my career. I have lost almost 300 games. On 26 occasions I have been entrusted to take the game winning shot, and I missed. I have failed over and over and over again in my life. And that is why I succeed.”

Most of the time, change sucks. It’s scary looking down the barrel of the “change gun”, knowing it might be explosively expensive, whether you spend time or money. After all, practice doesn’t make us perfect – but it does make us BETTER.

But listen up: change and failure and an exploding gun don’t have to scare you. Take it from Walt Disney:

“It’s important to have a good hard failure when you’re young… Because it makes you aware of what can happen to you. Because of it I’ve never had any fear in my whole life when we’ve been near collapse and all of that. I’ve never been afraid.”

When he was growing up, Disney was told he “lacked imagination”. Oh, if his teachers could see what he created! I’m a little biased because we have Disney World three hours away. We also have the Edison Estates. You know Edison, the guy who was “too stupid to learn” and then made 1000 patents and the light bulb. Dr. Seuss who had 27 publishers reject his first book. Each one of them took the failure and negative responses and instead of giving up, changed. They worked harder and they worked smarter.

All that to say, when it comes to employing a property management company, things have to change. Don’t be scared, it’s necessary. Maybe you’ve dealt with vendors and tenants and the hassle of collecting rent up to now. You’ve dealt with eviction and compliance and communication. And I understand, so far it’s been okay. Don’t be afraid to invest in your investment.

Because instead of okay, you deserve to be stretched out by the side of a pool as your investment earns you passive income.