Top 5 Tenant Red Flags Every Shopping Center Owner Must Watch For!

  Hey everybody, Joseph Gozlan here with Eureka Business Group, and today we’re talking about the five red flags every shopping center owner should be looking at when he’s looking at a prospective tenant.

Red flag number one we’re looking for in a tenant in a shopping center is are they paying their rent on time? If they are consistently late, if they always have excuses, if there’s always my grandma is in the hospital, the dog ate my homework, my supplier didn’t pay me, and so on.

We got a problem. This is not a healthy business. And when the business is not healthy, the chances that they’re going to survive the chances that going to be attended for long term is a problem.

So work with your property management to make sure they are in constant contact with that tenant and keep an eye on the situation to make sure that you don’t get into a position where you are blindsided by the fact that they’re closing and leaving the business. Red flag. Number two is Communication if you have challenges communicating with the tenant if they’re not responding if they are Very lagging a lot of situations like this. That’s a red flag Now when you’re dealing with a bigger tenant if you have mcdonald’s as a tenant, yes, that’s a big corporation The cogs move really slow red tape and so on Okay That’s one thing.

But if you have a small business owner in your shopping center and they’re not really communicative, we have a challenge and we need to look at that red flag,

number three, look at their space. Look at their unit. Is it messy? Is it clean? Is it. Organized. Is it a chaos? Every business owners run their business differently, but there is a clear understanding when you walk into a store. Is it a well organized business or is it a mess? If it’s a mess, it’s a red flag.

Yes, some people thrive in chaos. Yes, some businesses survive that, but most likely if they’re messy in their space, their business is not very organized and their financials are probably messy as well. So that’s a red flag to pay attention to.

Red flag number four, high turnover of employees. A good business will have longevity with their employees and a messy business or a business that is in trouble. A business that is not managed correctly. We’ll have a high turnover of employees. Are there some industries where the turnover is higher than usual? Yes, But, generally, it’s easy to identify the fact that every time you walk into the store there’s new faces over there, that might be a red flag to pay attention to. 3,

red flag number 5 actually starts at the beginning, before they even move into the place. If they are in the store, Really really hard to negotiate with and I’m not talking McDonald’s playing their strength We’re not talking about a big national retailer that is pushing their weight around We’re talking about somebody that nitpicks on every little detail somebody that is giving you a hard time through the negotiation and Insist on unreasonable things that is a red flag.

You might want to reconsider if that’s the right tenant for you, if that’s the right tenant for the shopping center. So pay attention to that during the negotiation phase with the tenant and make sure that if it feels wrong, it’s probably wrong. So don’t get married to the idea of having that tenant in the shopping center unless they bring a huge value to the entire shopping center.

There’s another honorable mention of challenges or red flags that to look for in a tenant If they are not engaged with the environment with the community with the other businesses in the shopping center That could potentially be a red flag a good business is a business that has great relationship with the community The community loves the business the business love the community.

There’s an interaction there So think about it as well. You won’t see that until later in the game But it’s something to pay attention to

 okay. So that covers our top red flags for tenants for shopping center owners. Pay attention to that This can help you save a lot of money in the long run This can help you make a lot of money in the long run if you don’t put the wrong Tenant in the shopping center because here’s the thing a bad business owner Doesn’t impact just their business.

They can impact the entire shopping center. They can create a toxic environment they can create an environment that is not good for the other businesses in the shopping center. So very important to pay attention to these things.

That’s it for today.

I’m Joseph Gozlan with Eureka Business Group. We are retail experts in the Dallas market. If there’s anything we can do to help you guys, feel free to reach out to us through email, phone call. On our website, we have contact forms and you can even leave comments here below.