Selecting the Best Tenant selection assignment for a Vacant Store: A Case Study of Buy Here Mall

Question

Task: What are the key factors in selecting the best Tenant selection assignment for a vacant store in a mall to ensure stable revenue and long-term Tenant selection assignment?

Answer

Introduction

One of the main challenge small businesses faces today is the high rate of failure caused by high overhead expenses such as rental and wages which push the business to failure. This is not good news for malls like Buy Here as they too experience losses due to needed to locate new Tenant selection assignments, the high cost of maintenance required to renovate each shop in preparation for the next Tenant selection assignment. This makes it critical to evaluate Tenant selection assignments carefully so as to identify Tenant selection assignments who will remain longer which will deliver a more stable income for the mall and reduce maintenance costs.

Selecting the best Tenant selection assignment for the Vacant Store

Currently, Buy Here Mall has three interested Tenant selection assignments but it’s important to select the right Tenant selection assignment and one who will remain the longest period and generate the most revenue to the mall owner. The interested Tenant selection assignments include a Doughnut Shop, a Toy Store, and a Hair Dresser. To determine the best business to a lot the shop it’s important to consider their products and services they offer. It is always best to prioritize giving Tenant selection assignment to a business which offers basic needs such as food, healthcare, and clothing. In this situation, the best choice would, therefore, be Applicant 1 – Red Horn Doughnut.

Factors Supporting the Tenant selection assignment Choice

People Are Always Willing To Spend On Snacks

Reviewing the mall's current Tenant selection assignments reveals the mall lacks a snack shop which is a necessity at any mall. Food being a basic requirement every person loves and is willing to spend money on, setting up a Doughnut shop is likely to attract many customers visiting the mall as well as pedestrians and commuters passing by the mall. Doughnuts are also very affordable snacks and loved by many which add to the likelihood of the business registering success.

Customers Having Access to Mall on the Run

Commuters mainly comprise of business employees who are rushing to work and many would rather pick up a quick meal or breakfast while on the move. Doughnuts tend to be the perfect snack for commuters as they are economical and ready to pick on the move. This is likely to see Red Horn Doughnut register a constant flow of customers on a daily basis both from the neighbourhood and commuters.

Stable Revenue

Buy Here mall intends on implementing a new revenue collection strategy which would see the business collect 5% of the business sales as the rental. This makes having stable revenue very important for the Mall thus making Red Horn Doughnut the most suitable candidate. This is due to the business confidently predicting each of its stores makes sales worth 1,000,000 per annum which mean that Buy Here Mall can expect to collect a stable $50,000 per annum and rental revenue.

Prediction of Long Term Tenant selection assignment

With several factors such as consumer spending preference, the quick product available, and stable revenue generation favouring Red Horn Doughnut it can be predicted the business will also offer a long term Tenant selection assignment. Businesses will usually remain at the prime location as long as they are generating good sales and profits thus its likely Red Horn Doughnut will offer a longer Tenant selection assignment term as compared to the other applicants.

Conclusion

While selecting businesses it’s always advisable to prioritize offering Tenant selection assignment to business which offers basic consumer products like food and snack. This is due to most people being open and willing to spend on food and beverages as compared to non-basic products or services.

References:

Allen, Gary and Ken Albala. The Business of Food: Encyclopedia of the Food and Drink Industries. WestPort: ABC-CLIO, 2007.

Baker, Kent and Peter Chinloy. Private Real Estate Markets and Investments. Oxford University Press, 2014.

Kyle, Robert; Floyd, Baird and Marie,Spodek. Property Management. Chicago: Dearborn Real Estate, 2000.

Nogler, Luca and Udo, Reifner. Life Time Contracts: Social Long-term Contracts in Labour, Tenant selection assignment and Consumer Credit Law. Eleven International Publishing, 2014.