CRE Developers & Location Analytics: Finding the Right Retail Tenants
May 17, 2022
In 2021, commercial property sales were a total of $809 billion. But, is 2022 going to be just as profitable for CRE developers? According to the Motley Fool, 2022 commercial space sales are excepted to exceed 2021, but there will be more challenges for brick-and-mortar retailers. To win over retail tenants, commercial property developers need to provide them with data that proves that their retail space space is the right fit.
Here are three ways location analytics can help commercial property developers invest in the right retail tenants:
1. Determining Market Demand
When determining how and where a retail business should grow, the most important factor in the process is understanding market demand.
The most successful CRE development projects match services and products offered by retail tenants to consumer needs. Thorough market research identifies ideal customers based on demographic factors such as income or marital status. However, demographic data often does not reflect the consumer preferences and interests.
With detailed customer data, it is possible to develop a customized profile that identifies ideal customers, with insight into where they live and how to find similar customers to them. Based on that profile, a predictive model can be built to show developers exactly how many core customers live in a specific area. By predicting what each customer will be worth to the retail store or restaurant, this profile can forecast the revenue that a new location will generate – allowing retailers to analyze any location that is under consideration.
2. Selecting the Best Location
Location is often considered the most important element to the success of a commercial property. Site selection of commercial property is a very difficult task, and mistakes are quite costly. In order to make a sound investment, commercial property developers need to take into account many factors, including amount of foot traffic and market demand. Location analytics can help them choose the optimal location for retail space.
Considerations must include the needs of each retail tenant. The wrong location could greatly impact the success of the lessees. With location analytics, commercial real estate developers and potential retail tenants can be reassured that their investments are worthwhile.
3. Analyzing the Competitive Market
A thorough understanding of a retailer’s competition, especially the habits and interests of their customers can provide them with valuable insights for a dynamic competitive advantage.
Understanding the moves competitors are making can help CRE developers determine how nearby competitors could affect their lessees. The competition could be making a move to acquire some of their own customers, with a persuasive marketing campaign or new product offerings. A competitive market analytics can be conducted to to help counteract the competition’s overall strategy.
Better Site Selection with Enterprise Location Intelligence
Enterprise location intelligence can help CRE developers choose the best location for their tenants. By enriching other datasets with location analytics, commercial property developers can increase the likelihood of their lessees‘ success at the new location — and improving sales, revenue, and ROI. For more information on using location analytics for commercial property management, contact one of our experts today.