Successful retail centers make room for small business tenants
As the owner and manager of multiple retail centers, we keep a close eye on U.S. gross domestic product, which increased by 2.4 percent in 2015.
Why would we monitor gross domestic product, which is the measure of everything we produce? Because we want a strong tenant mix filled with the producers, makers and retailers in the nation.
We also pay attention to consumer spending — the single largest determinant of U.S. economic growth — which rose 3.2 percent in the third quarter of 2015 and remained solid in the fourth quarter. Economists are predicting a 2.5 percent growth in this year's first quarter. That's good news for small businesses.
At the West Shore Plaza in Lemoyne and Silver Creek Plaza on the Pike in Hampden Township, we see firsthand the impact of a confident consumer market and the willingness of small-business owners to take on risk as they expand. Since 1954, our tenanting strategy has been very effective and it's captured in our tagline: Commitment to Community. Opportunities for Enterprise.
Because we live where we develop, we seek a tenant mix that includes 60 percent or more regional small businesses. Every retail center needs the grocery anchors like Karns and the junior anchors like CVS, PetValu and Buffalo Wild Wings.
The lease negotiations and credit histories of national retailers can be very different and much more attractive to owners than those of non-traditional or new-business owner tenants. But we believe the community benefits from a diverse family of stores including goods, services and dining choices, as well as national and local, big and small, franchises and entrepreneurs.
In our experience, the plazas that thrive through every economic cycle and become sustainable shopping destinations survive because they have a healthy inclusion of entrepreneurs and small-business owners. In Central Pennsylvania, we're known not for the number of Starbucks on every corner, but for our flourishing entrepreneurs — the people actually producing the products that are quantified in GDP.
We need the Starbucks shops, but we also need the woman-owned Macris Chocolates that creates customer events in partnership with the PA Fine Wine & Spirits store six shop doors down. We need the family-owned True Value hardware store that sells a father bird seed and a Weber grill, while the children run next door to PetValu. We need K Novinger, the young jewelry artisan who designs one-of-a-kind rings and sponsors a plaza-wide community campaign to fight pediatric cancer.
Most importantly, we need tenants that are job creators. Putting people to work has immediate community benefits.
One of our newest tenants, Polished Salon, Spa and Wellness, a woman-owned salon, praised us for walking her step-by-step through the entire lease negotiating process and for taking the time to understand her business model and customer base. She remarked that some small-business friends were unaware that plaza owners would be willing to work with tenants to help them reach their growth goals. Her salon complements our existing tenant mix and will add frequency-of-visit shoppers for the West Shore Plaza.
We are partners with every tenant — regardless of the square footage of their space, the size of the retrofit or the length of the lease — and are financially and emotionally invested in their success.
In fact, it's personal for us. Not only do we provide an address and opportunity for enterprise growth, but we add marketing support, social media amplification, coordinate Small Business Saturday and Shop Small events, and offer public relations and media opportunities. These can be game-changers for small businesses and are often out of reach for their marketing budgets.
As we search for the next entrepreneur or small business to join our plazas, we look for tenants that bring "heart" to our community. At Smith Land & Improvement Corp., it's never just about filling space, it's about making place.
Richard Jordan II is the CEO of Smith Land & Improvement Corp., based in Camp Hill.