The Citadel
By Tony Ozelis

Among the many ill-conceived plans for shopping centers are those that can only be best described as “The Citadel”.  Just like their imposing fortress counterparts, it seems that this design has a very similar effect on customers…it has a tendency of keeping them out.

shopping center photoMany times these projects are the result of an overzealous town board looking for an alternative to the usual “seas of asphalt” that usually act as the front lawn for many suburban shopping centers or a developer looking to maximize the physical constraints of a property.

From the town’s perspective, by placing the parking lot behind the structures it would serve to hide what can be an open span of ugly bituminous pavement. But as you can see in the following photograph, the unfortunate side effect of this is that it also hides the tenants and parking configuration from the public view. And need we remind you that in real estate Visibility is King.

aerial photo of shopping center “The Citadel” located on the north-east corner of the intersection and a very successful development sitting the north-west corner are but 200 feet from each other but might as well be on different planets when it comes to vacancy rates. While the traditional shopping center boasts a nearly 100% leased rate, it’s poorly designed counterpart to the east has but one single tenant, a day care center.

Originally conceived as a neighborhood-type strip center anchored by a regional supermarket chain with 10,000 square feet of retail support, this “brainchild” was designed and built at the direction of the town’s planning board who would only give their approval to the project if the developer agreed to site the project this way.

closed shopping center photoIt wasn’t long after the project was completed that the supermarket started falling on hard times and quickly took the smaller tenants with it. Within a year and a half, all of the stores closed; victims of a poor design.

So, is the citadel a “Bad Dirt” location for every type of tenant? Well…the quick answer is No. The day care center seems to do fairly brisk business here as would many other types of businesses that offer goods and or services either by appointment, membership or other non-impulsive business models (Health clubs, medical offices, supplemental educational services, etc).

However, many tenants get drawn to the proverbial rocks by the Sirens of low rent and other incentives that some landlords use to attract unknowing tenants. For most businesses, especially those that rely on impulse traffic (which, by the way, is a much higher figure than most people believe), these centers offer nothing but an opportunity for a slow financial death…regardless of how cheap the rent is.

As the legendary development guru, Pat Chiacchia has been known to say; “You can never pay too little for a bad piece of real estate”. It's wise to heed his advice...that's why we made it a rule.

Happy Hunting…

 

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About the Author: Tony Ozelis is a real estate development consultant and frequent contributor to LocationIsland.com.  Mr. Ozelis' 23 year career has primarily been focused on restaurant and retail development throughout the United States where he has served as a Director of Real Estate for companies such as Pizza Hut, Inc., Boston Chicken, 7-Eleven and Wendy's International.

With well over 700 successful projects completed to date; he has been at the forefront of incorporating new technologies into corporate real estate development and regularly teaches on subjects such as; Strategic Market Development Planning, Contract Negotiations and incorporating Green Technologies into site design.

Mr. Ozelis is a member of both the International Council of Shopping Centers (ICSC) and the United States Green Building Council (USGBC).

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