This post was written by Dan Jackson, a 2012 UST MBA graduate. Dan completed many of his electives in real estate including participation in the spring 2012 REAL 714 International Real Estate Development course in the Cayman Islands.
The Minneapolis-St. Paul Business Journal recently reported that Neiman Marcus, a high-end retailer in downtown Minneapolis would be closing its doors in July of 2013. This is not the first time that a high-end retailer has decided to close its doors or had to alter its image in downtown Minneapolis. The article stated that in 2004, Saks Fifth Avenue reconfigured its main store concept into Saks Off Fifth, a lower-priced version of the well-known retailer.
With the announcement of this closure, I got to thinking about the possibilities of a tenant that could fit into the space that has been held by Neiman Marcus for about 20 years. I reflected on a moment from my studies at St. Thomas. One particular UST real estate course (REAL 746), introduces students to the techniques used to determine the best and highest use of a site from a market analysis and feasibility perspective. It is a course that I took this past spring. While there were many techniques that we learned throughout the course of the semester, six factors immediately come to mind when trying to provide market analysis for a particular site. I’d like to walk you through each of these six factors and highlight important elements about the site that relate to each of these factors, but ultimately will leave it up to you to decide what kind of tenant(s) would be a good fit for a replacement.
The market analysis process reviewed during the semester consisted of six points that guide real estate professionals through a market and feasibility analysis of a particular site. The six steps, as outlined here will be used to provide a general idea and outline, but will not go too much in depth, given the length of this post. The purpose of this post is to examine and look for trends that will help real estate professionals begin to identify the next best tenant(s) for this space. The six steps that I refer to here are specifically related to identifying a space for a shopping center, but similarities exist between this process and the processes for other types of properties. (more…)