Successful Retail Landlords Handpick Tenants

LOS ANGELES—The Malibu Country Mart has signed three new leases, and will have a no more than a two-month interim between tenants. The retail center has been fully occupied consistently throughout its 25-year history—a success the owners attribute to the retail market's prime location and handpicked tenant mix.

“We are always very interested in the synergy and balance of the property, and so we work hard to try and have tenants that we think are not going to directly compete with other tenants,” Michael Koss, president and chairman of Koss Financial Corp., tells GlobeSt.com. “We scrutinize each tenant. We want a tenant that has a good track record, good finances and most importantly, a complementary marketing plan that fits in with the synergy and balance of the overall center. We like to have tenants that have a strong image and that are high quality.”

The new tenants to join the ranks include women's apparel store Wildfox, juice bar SunLife Organics and fitness studio Pure Barre, which will open in the fall. Although spaces are always filled quickly, tenant turnover typically occurs when an existing tenant is having trouble meeting the revenue requirements for the center. When a space does become available, the company opts out of a mass marketing campaign for a more tailored approach. “We have a leasing team that has relationships with the high-end brokers in Southern California and around the country,” explains Koss. “Most of the time, we target a specific type of tenant, or we cold call to try to find someone that meets our requirements. For the most part, though, we have a waiting list of tenants that want to get into the Malibu Country Mart.”

Located at 3835 Cross Creek Rd. in Malibu, the 90,000-square-foot shopping center has a total of 67 retail shops. Although its sits on six acres in a prime location—across from the ocean on one side and the mountains on the other—the property has other draws. “We have a children's playground, picnic grounds, exquisite architecture gardens and landscaping, and we have six acres of parking. It is a very unusual property,” Koss says. “It is one of the most iconic and unique properties in the country.”  

Other retail landlords have been renovating their properties, in some cases significantly, to attract the right tenants. Vestar, for example, signed a slew of new anchor tenants after announcing a $12 million renovation, which will be complete next year. However, hand picking the tenant mix is also integral to creating a successful center, driving traffic and enhancing revenues.