Is your tenant headed for trouble? The following article is an excerpt from the new IREM key report, strategies for working with

Because business was good from the start, the merchant felt no need to spend money on advertising. After a year or two, the buzz died down and so did his customers. Almost immediately, the store owner approached me for a rent reduction, maintaining that foot traffic had decreased substantially, causing his sales to decline.

Because sales in the rest of the shopping center were holding steady, and even increasing, I decided a closer look was necessary. Would a rent reduction merely be a bandaid? Would this merchant be viable in the long run? We took a close look at the merchant's sales volume, customer service and marketing. We also recommended he hire a retailing consultant to help him examine his merchandising, inventory and buying practices.

As it turned out, the merchant was not stocking certain items that were his bread and butter, and as a result customers weren't buying. Also, because he had been used to so much spectacular--and free--marketing, he had chosen not to spend any money on advertising. He was not attracting new customers. In the end, it took a bit of convincing, but the merchant was able to overcome both issues and his sales began to rise again.

by Shannon Alter, CPM[R]

Shannon Alter (shannon@alterconsultinggroup.com), CPM, is a real estate consultant in Santa Ana, Calif. Her company, Alter Consulting Group, can be found at Alterconsultinggroup.com.

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