Why is Three so special when it comes to the minimum number of units a small retail business should have to be part of your reach-out?

Answer:

When a small retail business owner makes the decision to expand, to go from a single unit to two units, it fundamentally changes his business. More often than not, the next time that business owner changes his number of units, it is to go back to a single location, or, even worse, to zero locations and, frequently, bankruptcy.

The first time a small retail business expands is very hard. It is stressful and fraught with pearl. Single or double unit operations can be some of the least successful retail tenants.

The magic happens when a retailer gets to three units. At three units, the business has expanded once, And then been successful enough to want to do it a second time. This is the dividing line. The chasm if you will, and most are unable to cross it. Those that do, particularly businesses that go from three to four or five units, can make fantastic tenants! The market has not only spoken to validate their business model, but the operators have proven that they can work through an expansion process!

Author

Gary Stevens

A retail real estate professional since 1986, having held leadership positions as both landlord and tenant for such companies as Samuels & Associates, Staples, Inc., Lifetime Fitness, Sears Holdings, Ahold Real Estate and RPT [NYSE].

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