Managing Retail Property - Chapter 12 Quiz

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Questions and Answers

Match the following roles with their primary responsibilities in property leasing:

Leasing Agents = Review management and marketing plans Property Manager = Evaluate prospect tenants Marketing Director = Create leasing packages Brokerage Agents = Find potential tenants

Match the components of a leasing package with their descriptions:

Layout Drawing = Shows the location of tenants Brochure = Contains pictures of the property Regional Map = Displays transportation routes Demographic Profile = Details market and customer base

Match the tenant evaluation criteria with their descriptions:

Sales History = Healthy trend in past sales Inventory = Adequate stock for operations Rent-to-Sales Ratio = Minimum rent divided by projected sales Profitability Impact = Expected contribution to center's profit

Match the types of rent with their definitions:

Minimum Rent = Set amount of rent due monthly Percentage Rent = Variable portion based on sales Base Rent = Fixed component of rent Recapture Clause = Provision for recovering costs Signup and view all the answers

Match the marketing methods with their descriptions:

Shopping Center's Website = Platform for advertising tenants Display Ads = Visual marketing in high traffic areas Billboards = Out-of-home advertising Online Classified Ads = Internet platform for tenant search Signup and view all the answers

Match the following terms with their definitions:

Anchor Tenant = Occupies the largest space in a shopping center Recapture Clause = Allows a landlord to terminate a lease early Breakpoint = Amount of gross sales where percentage rent kicks in Use Clause = Prevents tenants from selling particular types of goods Signup and view all the answers

Match the following concepts with their descriptions:

Lifestyle Shopping Center = Replicates the walkability of small downtowns Leasing Package = Includes maps, demographic information, and sales numbers Climate = Affects the design of shopping centers Tenant Mix = Reflects demand for various merchandise types Signup and view all the answers

Match the following terms with their economic implications:

Rent-to-Sales Ratio = Determined by dividing rent by sales Gross Leasable Area = Measure used to calculate share of pass-through charges Minimal Sales Figures = Influences the viability of a shopping center Open-Air Complex = Typically includes stores serving affluent consumers Signup and view all the answers

Match the following factors with their impact on shopping centers:

Demographic Information = Used for tenant mix decisions Shopping Patterns = Necessitate understanding local consumer behavior Open vs. Enclosed Malls = Dependent on climate considerations Sales Numbers = Included in a leasing package for tenants Signup and view all the answers

Match the following terms with their related concepts:

Walden’s Widgets = A more desirable tenant offering higher rent Department Store = Example of an anchor tenant in a mall Percentage Lease = Determines rent based on sales figures Demographic Research = Critical for shopping center management decisions Signup and view all the answers

Study Notes

Learning Objectives

Students will be able to compare different types of retail shopping centers
Identify different types of retail tenants
Discuss the importance of tenant mix in management planning
List the different roles of each member of a leasing team
Explain how to evaluate prospective retail tenants using the rent-to-sales ratio
Discuss common retail lease provisions
Explain percentage rent and breakpoints
Contrast the leasable area formula with the leased space formula for determining pass-through charges
Discuss the importance of the sales analysis report

Suggested Lesson Plan

Students complete Exercise 12.1 to review the previous chapter on managing office property
Overview of Chapter 12, "Managing Retail Property," which reviews the learning objectives for the chapter.

Chapter 12 Outline: Managing Retail Property

Types of Retail Property and Tenants
- Gross Leasable Area (GLA): a measure of square footage, including all tenant spaces, but not common areas
- Anchor Tenant: a large retail tenant expected to attract most customers.
- Shopping center categories: strip mall, neighborhood, community, regional, superregional
  - Strip mall: small, usually along a major thoroughfare, few tenants, small to medium anchor tenant, up to 30,000 sq ft GLA, smaller market area
  - Neighborhood: 30,000-125,000 sq ft GLA, typically a supermarket or drugstore as anchor
  - Community: 125,000-400,000 sq ft GLA, 15-40 tenants (often a supermarket, drugstore, department store), serve a 5-mile radius
  - Regional: 400,000-800,000 sq ft GLA, 80+ tenants, serve a 5-15 mile radius, including large movie theatres & large department stores as anchors.
  - Superregional: more than 800,000 sq ft, more than 3 anchor tenants.
  - Outlet & discount: no anchor tenants, customers from a wider area
  - Power centers: "category killers" cluster together in one center
  - Lifestyle: caters to affluent shoppers.
Retail tenants (types): Small shops, specialty stores, restaurants (outparcels), service providers (banks, etc.).

Management Planning for Retail Property

Regional Analysis: Transportation, local industries, tourism, climate
Neighborhood Analysis: Local transportation, neighborhood economic conditions
Property Analysis: Physical attributes, marketing, leasing, management quality, financial condition
Market Analysis: Customer base, competition, comparable properties, current trends.

Marketing Retail Space to Tenants

Leasing Team: agents, brokers, marketing director, property manager, owner
Finding Tenants: tenant profiles, advertising. review, and marketing plans, leasing package.

Leasing Retail Space

Tenant Mix: proportion of different types of retail tenants and their arrangement.
Tenant Evaluation: sales history, financial stability, suitability. Rent-to-sales ratio.
Lease Provisions:
- Minimum rent
- Percentage lease: percentage of gross sales above a certain point (breakpoint)
- Recapture clause: tenant fails to meet sales goal, landlord can terminate lease
- Late charges, pass-through charges.
Leasing lease provisions: terms, hours, security deposits, and signage (within reason).

Operations and Reporting

Operations: Security, maintenance, and marketing (to customers).
Reports to owner: sales analysis report.
Key performance indicators (KPIs) for Retail.
Reports and analysis of specific data (e.g. rent-to-sales ratio) as appropriate.

Exercises

Review exercise: Identifying concepts in office space.
Identifying types of shopping centers.
Evaluating retail tenants.

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Description

Test your knowledge on Chapter 12: Managing Retail Property. This quiz covers various types of retail shopping centers, tenant roles, lease provisions, and important metrics for evaluating retail tenants. Enhance your understanding of the retail property management principles discussed in this chapter.