By David Beitz, President and Co-Founder, Beitz and Daigh Geographics and Matt Felton, Datastory Consulting, LLC
"He's already dead, he just doesn't know it yet." That phrase, popularized by horror movies, describes the living dead who continue on, not realizing that their lives have passed. This phrase has also been applied to retail real estate sites—stores, restaurants, and service venues—with declining business and dwindling operating capital causing them to limp along with marginal profits.
Although these sites have outlived their usefulness in their current state, their owners cling to the hope that they will be able to keep the lights on for just one more lease cycle. There is nothing more horrifying than a real estate site that is not living up to its full potential, or even worse, a location that is losing money.
Here are five ways that using any agent can breathe new life into zombie sites, using mapping and GIS.
1. Find the best use of your site –
Understanding location can help retailers fight off the zombie virus. In real estate, According to David Z Beitz, President and Co-Founder of Beitz and Daigh Geographics, an Esri Business Partner that provides location research and marketing technology solutions, it all comes down to one simple question, what is the highest and best use for this land or this building?
"If a retail site is barely making it, analyzing its location can be proactively used to find opportunities that could dramatically increase the value of the real estate," Beitz said. "Maybe that tired restaurant location would make a great new bank branch. Or maybe that site could be combined with several other adjacent parcels to build a new apartment complex. GIS (Geographic Information Systems) gives users the tools to easily research locations, look at different scenarios, and find opportunities in order to make smarter and more profitable real estate decisions."
2. Fill that vacancy with the right client
Market dynamics change. That retail strip center that used to draw in willing shoppers, might be better suited now as a multi-specialty health pavilion. Landlords who understand this dynamic and show a willingness to adapt stand the greatest chance of leasing up their space. But often it takes a new set of glasses to “see” the market from the most profitable perspective.
Understanding the underlying data on health expenditures can help agents find the most suitable prospect for a location.
Matt Felton, President and Chief Storyteller at Datastory Consulting, helps landlords understand the trends and patterns in their marketplace to help them find better tenants, faster. As a 20-year veteran of Esri GIS, Felton has learned that maps are the best lens through which to view these market dynamics, and also the best way to build consensus between landlords and their tenants. “The first step toward leasing a challenging space is to clarify and quantify the specific opportunity at hand. You have to figure out what the data is telling you about your immediate market, and play to those strengths,” says Felton. “Once you have internal clarity about the real opportunity, you can then spin the data outward in the form of a story map. When future tenants are able to see the datastory for themselves, they’re much more likely to take that next step toward a lease.” This map-based approach to leasing not only helps the landlord see the story around them more clearly, it also helps them promote their space using the data-driven, persuasive power of GIS.
3. Ensure variety at your site
Beitz and Daigh Geographics assists various clients in the real estate and shopping center industry with GIS solutions tailored for leasing and development. They do this by first identifying potential retailers for a site, and then they use the technology to communicate with the retailer why a site is a good fit for that particular retailer. These research and marketing analytic packages, include interactive web-mapping aerials and are used to showcase a variety of retailers depending on the developer’s preferred tenant mix.
"Studies show that the more time customers spend at a shopping center, the more money they spend," said Beitz. "The retail destination’s goal is to make it your “third place”, that’s the place you go when you are not at home or work. Great shopping places provide a variety of activities for people in the community to connect through shopping, services, entertainment, and restaurant.”
"I think the key here for the developer is to add retail space only if it accomplishes the larger goal of creating a dynamic shopping place where people want to spend time. If you only look at retail square footage per capita in a market, then you will see many areas that appear to be over retailed. The problem is that often these retailers have not adapted to the changing composition of the market and some markets have a surplus of underperforming retail square footage that would be better converted to a higher and better use.” said Beitz
For example, when a client comes to Beitz and Daigh with an existing vacant retail space, new development site, or outparcel [a small lot at the outer edge of a shopping center, reserved for later sale]their staff explore a number of questions:
- What other retailers are nearby?
- Who is not in this market but is successfully operating in other similar markets?
- How do the demographics of their target retailer compare to the potential retailer’s other locations?
- Is this site on the “way home” side of the road?
- What is the daytime (employment) population?
- Where are the major employment centers?
- Where are the schools nearby that help determine the daily commuting patterns?
- Is the trade area population growing or declining?
- What are the incomes of the trade area?
- How many households in the trade area make over $100,000 a year?
- Which demographic shading maps best show best what is going on in the market? Income, Population Density, Population Growth, Education Attainment?
4. Get to know the market
GIS helps Beitz and Daigh’s clients to better understand and communicate the answers to these questions. In addition to maps and demographics, Beitz and Daigh has also been using Esri Tapestry Segmentation data to better understand its client’s markets. Tapestry classifies US residential neighborhoods into 65 unique market segments based on socioeconomic and demographic characteristics. By understanding lifestyles, life stages, likes, and wants of people, it is easier to understand what may interest people living in specific neighborhoods.
“Above and beyond demographics, the Tapestry data profiles the households and gives us a deeper view of the consumers in the market," said Beitz. Tapestry gives our clients the consumer understanding of the business equation to better capitalize on opportunities in the market. For example, we can calculate the percentage of grocery store sales by Tapestry segment. This gives us a clearer view of where the customer segments are located that spend the most on groceries."
5. Secure Access to Information Anywhere
In today’s real estate marketplace, he who has the most useful data, wins. Datastory Consulting knows this well because their clients who have embraced Esri’s ArcGIS platform to collect, organize, and share data are the ones experiencing the most notable success. The Datastory team works with real estate developers (like the David Hicks Company in Dallas, Texas), investors, and brokers (like MacKenzie Retail in Baltimore, Maryland to incorporate GIS technology into everyday real estate decisions.
Esri Tapestry data is an excellent source of data to provide insight into the purchasing habits of particular types of communities.
“There’s plenty of data out there if you know where to look,” says Felton, “but you need to make sure that it’s organized, secure, and available. Anytime, anywhere, and typically with very short notice…because that’s how the really good real estate professionals roll. The quicker they can access what we call ‘decideable’ data, the more likely they’ll move a deal forward.” As an ArcGIS Online Specialty Partner, Datastory helps businesses implement map-based portals and dashboards that give real estate companies the upper hand.
Datastory Consulting uses the Esri platform to deliver information to clients on any platform, anywhere.
Don’t succumb to the Zombie virus yourself. GIS can keep the undead stores at bay. Try a no-cost trial of ArcGIS Online for 60 days. You’ll see it’s just what the doctor ordered for healthy sites.
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