When evaluating retail space, rent and location are important, but they’re only part of the equation.
For retailers, the businesses operating nearby can also influence customer traffic, shopping patterns, visibility, and the overall experience of a retail center or commercial district.
What Is Tenant Mix?
Tenant mix refers to the combination of businesses and uses located within a retail center, shopping district, or other commercial property.
A well-balanced tenant mix may include businesses that complement one another and attract similar or overlapping customer groups. For retailers evaluating a potential location, understanding who else operates nearby can be an important part of the site selection process.
Why Does Tenant Mix Matter?
Surrounding Tenants Can Influence Customer Traffic
The businesses surrounding a retailer can affect how customers use a property. High-traffic tenants may bring customers to a center who also visit neighboring businesses, while complementary retailers and services can encourage customers to make multiple stops during the same visit.
Complementary Uses Can Create Cross-Shopping Opportunities
Businesses that serve related or complementary needs can benefit from being located near one another. For example, restaurants, fitness businesses, personal services, and retail stores may attract overlapping customer groups and create opportunities for repeat visits.
Visibility Isn’t Everything
A highly visible space or prominent corner location can be attractive, but visibility is only one factor to consider.
The surrounding businesses, access, parking, traffic patterns, property configuration, and overall activity at the center can all affect how a retail location functions for a particular business.
Anchor Tenants Can Influence Traffic
Grocery stores, national retailers, entertainment uses, and other high-traffic tenants can play an important role in attracting customers to a shopping center or commercial area.
For retailers considering a location, understanding the role of anchor tenants and other major users can provide additional context when evaluating a property.
Consider Your Target Customer
The right tenant mix depends on the customers a business is trying to reach.
Demographics are important, but retailers should also consider consumer behavior, shopping patterns, surrounding businesses, traffic, accessibility, and how customers are likely to use the area.
How Should Retailers Evaluate Tenant Mix?
Tenant mix should be considered alongside other site selection factors, including:
- Location and accessibility
- Visibility and signage
- Parking
- Traffic patterns
- Demographics and consumer behavior
- Rental rates and occupancy costs
- Nearby competitors
- Complementary businesses
- Anchor tenants
- Future development in the surrounding area
Looking at the full retail environment can help a business evaluate whether a particular location aligns with its operational and customer needs.
Ask a Broker
With experience in retail brokerage, investment sales, and land transactions across the Gulf South, Camden St. Romain works with retailers and investors evaluating commercial real estate opportunities.
A retail broker can help clients compare locations, evaluate surrounding businesses and market conditions, identify available opportunities, and negotiate lease or purchase terms.
Have questions about retail site selection, leasing, or investment strategy? Contact Camden to learn more.
