The “Shopping Center” concept is one of the most successful commercial property models, and a building type which has a large effect on everyday urban life. Mall designs must respond to user needs, climate, design and planning trends. Shopping mall developers face significant financial risks because malls are buildings without an alternative use and unsuccessful projects burden developers with large financial losses and cities with unusable interruptions in urban infrastructure.
The main concerns regarding the design and construction of shopping centers are financial viability based on the market, budget restrictions and the potential return on investment (ROI). Given the significant amounts of capital required to develop and construct shopping centers, the builder/ developer needs to be confident that the project will achieve an appropriate ROI. Even successful projects can incur significant losses.
In order to avoid significant financial losses to the client, Commercial Building Inc. (CBI) developers conduct feasibility analyses to identify potential changes of market conditions and competition in order to minimize risk. In depth market analysis is used to define the size and character of the building based on the population of its area of influence, as well as existing and expected competition. CBI design strategies is used to differentiate a mall from its competition, and ensure economical, problem free operation in the future. CBI commercial contractors conduct thorough cost analysis to establish and assess the project’s viability when compared to its expected net present value, the foreseen future cash flows, and residual value.
Due to the fact that shopping malls require large initial investments, most shopping center investors/ owners are committed to a financial return over a long period of time. With this in mind, here are a few points to consider before making your initial investment and commitment to your next retail construction project:
Know your limits
While you shouldn’t shy away from a major shopping center construction project, it’s also important to know your limits. The best national retail construction firms will have significant shopping mall experience and can gauge just how much retail construction work a shopping center construction project will need to make it viable.
Develop a support plan
A shopping center is only as good as its tenants, national retailers are typically the biggest traffic draw. Shopping mall investors should know the amount of interior construction upgrades and tenant improvements it will take to keep current tenants happy. Also, national tenants like to be located by other national tenants. Will the shopping mall require significant build-out work or floor plate reconfiguration to accommodate more national retailers? These are questions that have to be asked when developing your support plan. It would be a waste to purchase a shopping mall only to see top tenants leave.
Shopping Center success depends not only on accurate analysis of market demand and strategic selection of a site, but on a design that has a well planned circulation and tenant allocation, animated public spaces and functional operation, in order to attract strong tenants whose success in turn depends on the successful attraction of the final consumer.
Site Selection
Selecting the best location or site for an shopping center is a fundamental decision for any retail business. Location affects customer patronage, market share, sales revenue, and profit-and consequently the long term performance and viability of the business itself. In turn, the performance of businesses at a given location affects the occupancy and rental rates that the property can achieve. A well located shopping center can be successful even in a weak economic environment or an overbuilt market, while a poorly located center may eventually fail. Therefore, understanding how location affects a retail business is paramount to the success of owning or investing in shopping centers.
Key to Success: Trust
To Commercial Building, Inc. (CBI), trust is the most important issue in any retail commercial construction project. As the world becomes more complex, faster and global, the need to make the organizations smarter results in added complexity. In today’s age, technology may support communication and information sharing but will not drive commitment and trust.Trust is achieved through constant open lines of communication, having a strong and knowledgeable overall understanding of the project from the design director, and working together with a common goal.
Commercial Building, Inc. (CBI) is a trusted retail commercial construction company with knowledge in Shopping Centers, Medical Offices, Churches, schools, Industrial and Commercial Upfits, Restaurants, Retail Stores, Vanilla boxes, and Projects from the ground up. CBI’s honesty and credibility are an essential part of our success.
We currently serve Fayetteville, Fuquay-Varina, Sanford, Lumberton, Pinehurst, Pittsboro, Dunn, Southern Pines, Garner, Smithfield, Charlotte, Apex and many other area in North Carolina. We pride ourselves in handling multifaceted projects, attention to detail, and know-how of the projects that CBI constructs. Call 910-818-6811 Commercial Building, Inc. for an estimate on your retail construction project needs today.