Month: August 2010
If you build it, they will come.
Posted by Rickey Hayes on August 24, 2010 in Blog | No Comments
Retail Attractions, LLC
If you build it, they will come. That might have been true a few years back, but not in today’s market. Gone are the days of speculative development where investors would develop land or build storefronts with no formal commitment from the end users of the finished product. Today, no one will commit without a signed contract sealed with a drop of blood from both parties.
With spec development, the builder anticipates that a demand exists or will form for the product when it is put on the market. In the 2000s when retailers were expanding at unprecedented rates, that wasn’t a bad bet, but with the current economic climate, investors need a reason to stick their necks out. Developers need guarantees that they will have tenants to fill their spaces.
Not only are developers wanting guarantees, they are being more cautious about the size of the development. It takes a very special community to justify large scale retail development projects like those you saw emerge from the retail boom of the 2000s. Most cities have no chance of having this type of retail center locate in their community because there isn’t retail growth to support this type of center in most cases. What you will see is smaller developments that are anchored by a major retailer. This model has proven successful because everyone benefits: banks are willing to finance it, communities can support the retailers and cities thrive on the added sales tax revenue.
However in this economy, these deals will not happen without public-private partnerships and convincing incentives. Every retail opportunity has dozens of communities competing for a chance, and the community that offers the best deal will come out on top. Cities that are not willing to work with retailers and share the burden of development will not get the deal.
Retail Attractions has years of experience working with communities, developers and retailers to find common ground and get things done. Our motto is “economic development, one relationship at a time”, and we believe developing relationships and finding solutions that benefit all parties involved is the way to successful retail development. We work primarily in the Oklahoma/Arkansas/Texas region, but we have relationships with investors nationwide. If you would like to discuss your retail opportunities, please contact Retail Attractions.