You’ve created your merchandising plan with the perfect tenant mix. You’ve honed your development pro forma to pencil. Your team is out on the street chasing down the deals that you need to meet or exceed your vision and financial goals. We’re done – right?
Retail development is a fine balance of art and science. The next step is to have a clear process that allows your team to deliver the many, many promises that you have or will be making to your retail tenants. The 5 Phases of Retail Tenant Delivery below provide the battle tested framework for successful and happy merchants at your shopping center.
Phase 01 – Leasing Support
We all know that time kills deals, so having the support needed to answer Tenant inquiries quickly and accurately is invaluable. The retail delivery manager (aka Tenant Manager, Tenant Coordinator) acts as concierge and liaison (that’s a lot of French) by setting up the Design Criteria, tracking and reporting systems, and answering questions regarding the premises to facilitate design and construction. Knowing the proper amount of electrical capacity required by a Tenant and not delivering more than is needed can frequently save $20,000+.
Phase 02 – Design & Plan Review
The devil is in the details and it is imperative to double check on paper that which is being planned. With great team work and collaboration, both the Tenant and Landlord can meet and exceed the design standards set in the Design Criteria Manual. Great design maximizes quality and constructability while minimizing cost. It is SOOOO much easier to move a wall on paper versus one that has already been installed. This is the time to measure twice because you can only cut once.
Phase 03 – Landlord Construction
There are 24 traditional Landlord work items that can be required for Tenant delivery. The construction lease exhibit (Exhibit B or C) defines which of those are required to be delivered by the Landlord for each Tenant. Tracking, designing, coordinating, bidding, contracting, installing and then delivering these items are critical for Tenant premises acceptance and space turn-over.
Phase 04 – Tenant Improvement
Landlord turn-over and Tenant premises acceptance is one of the most important milestones in the process. However, this is where the fun really starts. Tenant contractor check-in, daily coordination, material delivery and staging, scheduling municipal inspections, merchandising and all other tenant fit-out activities are all critical tasks required to get the Tenant open and ready for business. This is as much art as it is a science and great communication, coordination and negotiation skills can make the difference whether a store opens its doors and rings its registers.
Phase 05 – Close-out
This often overlooked phase is critical because it verifies and validates that all parties have lived up to their construction obligations. While creating the punchlist is the obvious activity, Tenants should provide to the Landlord all required documentation including the certificate of occupancy, final lien waivers, as-built drawings, schedule of construction values, and all other documentation required to satisfy the release of Tenant contractor security deposits and Tenant Allowances. This final administration phase makes the commencement of lease administration possible and marks a successful fit-out.
Follow this time and battle tested sequence for retail tenant delivery and you will be insured that you deliver all of your promises while getting more of your Tenants open on time.