How Do You Compete Against Much Lower Rent

From the Next-Door Shopping Center…

You might have come across your nearby competitors’ shopping centers offering a much lower rate than what you’re quoting on your property. First and foremost, you need to embrace your property and the rental rates that you’re advertising. In many situations, the leasing agent participates in coming up with the rental rate, and in others, he or she does not.

I’m a huge proponent, obviously, of the leasing agents participating in coming up with the rental rates, and we want to come up with the rental rates by having a very thorough 10+ on a scale from one to ten, understanding and being knowledgeable of the market.

It’s important to really understand who’s got the better co-tenant, who’s got the better visibility, who has better space sizes… Is your center on one side of the highway vs. the other center being on the other side? Is there a geographical barrier dividing the two? Is there higher traffic could on your side vs. their side?

Let’s compare:

I had a shopping center in a sub-market where I was charging $30/sqft and the area’s shopping centers were charging $ 20/sqft. However, I only had two vacancies and the other centers had four or five. Why?

My two vacancies were 1,200sqft each, and the other center’s vacancies were 3,000-4,000sqft, which are much harder to lease. My center had direct visibility, exposure, and excellent egress and ingress off of the main road, whereas my competitor’s vacancies had outparcels blocking their exposure. They might have been elbow spaces on an L-shaped plaza as opposed to my shopping center being directly parallel to the main street. My shopping center had stronger co-tenants as opposed to their shopping center…

Other times, you might have the only former restaurant space or the only space that could potentially be a restaurant. 

There was a time when there were 30 burger chains looking in my sub-market and every shopping center around had a burger chain except for me. I was charging $5/sqft more than my competitors because I knew that this particular space, which was a former wings restaurant, I could get the extra $5/sqft and I could see, from the flurry of activity of the burger chains looking, that I could get a burger chain. On top of that, I had three other restaurants doing phenomenal sales numbers in my shopping center. I just had to sit and be patient to get the higher rent, which I did. 

If you understand the market completely and believe your spaces don’t hold the candle to the other spaces in the market, and the other property owners are charging less, then I recommend you produce a very thorough market study, give it to your boss and discuss it. Find out where your competitor is coming from. Don’t just whine and say, “My boss wants $40/sqft when the market is $30/sqft,” without checking off some of the topics that I discussed above. 

If you’re right and your boss or the person who wants you to get the higher rent is located out of the market, meaning he or she doesn’t understand the market, then that’s a problem. Your boss might have told you to get $40/sqft in rent because they recently bought the shopping center and that’s what the underwriting analysts in the acquisition department told them that $40/sqft was what they had to get to support the purchase price. You need to discuss this with your boss, however, doing so without thorough market information would not be a bright move.

That’s how I deal with shopping centers that appear to be quoting significant lower rents compared to my rents. 

Learn More:

How to Find Spaces That Are Not Yet on the Market

Maximizing Renewals

New Trends for Expanding Retailers

Knowing Your Market Means Knowing Your Competition

 

Share

Blog Comments

More Posts

Organize Your Intel Like a Rockstar

You’ve done the boots-on-the-ground market recon—now it’s time to organize all that golden intel into a proper market study. And no, scribbles in a notebook don’t count. Start by building a simple Excel file. List your subject property at the top, then add nearby shopping centers in order of most competitive to least. Each column should reflect a key data point you collected: square footage, rent, occupancy, anchors, visibility, etc. And don’t forget a notes column—this is where you drop your side-by-side comparisons. For example: “Great parking, but less visible than subject property.” Here’s the truth: Your first draft won’t be perfect. That’s okay! I go through at least 6 drafts when coaching rookies through their first real market study. You’ll refine and tighten your list as you go. Start broad, then narrow it down with every pass. Market studies are living, breathing documents—and when done right, they’re your secret weapon in leasing negotiations. So organize your info, and let the data make you unstoppable.

Read More

Don’t Rely on an Online Listing Service—Here’s What to Do Instead

My grandfather used to say, “You get nothin’ for nothin’”—and when it comes to online listing services like LoopNet and CoStar, he wasn’t wrong. Sure, they’re fast, convenient, and yes, sometimes free. But if you’re using them as your only source of leasing intel, you’re short-changing your strategy—and your results. These platforms can be helpful in a pinch (like when your boss swings by your desk and wants market rent data yesterday), but here’s the hard truth: they’re rarely 100% accurate. Rents, availabilities, square footages, tenant mix—there’s always a lag, a gap, or a missing detail. And if you’re relying solely on that data to drive your leasing decisions, you’re playing a dangerous game. A true Rockstar leasing agent knows this: real market knowledge doesn’t live in a database—it lives in the field.✅ It’s built by walking the centers.✅ Talking to tenants.✅ Calling brokers.✅ Grabbing coffee with competitors.✅ Driving your trade area and seeing what’s happening in real time. Online tools are great supplements, but they are not substitutes for boots-on-the-ground research and relationship-building. Want the real scoop on your market? Close your laptop. Grab your keys. And get out there. Your next deal—and your reputation—depend on it. 4o

Read More

Partner Up with the Residential Rockstar

Want the inside scoop on who’s opening, expanding, or quietly crushing it in a small town? Hook up with the top residential real estate agent. No joke—they’re the unsung heroes of market intel. In markets under 150,000 people, residential agents often are the community. They know the businesses, the buzz, and sometimes… they’re married to the mayor! Here’s how to make the magic happen:✅ Identify the top residential agent in town.✅ Take them to coffee and let them know you’ll pay a referral fee—about $0.50 per square foot is fair in most markets.✅ Make it EASY. Tell them: “You bring me the lead, I’ll do the deal—and you still get paid.” Yes, residential agents speak a different real estate language, but with the right approach, this partnership can be pure gold. Think about it: they’re out touring with business owners looking for homes… who might also be looking for a space to open their next location. Or they’re selling to investors who want to open something in your center. So don’t sleep on this! Residential rockstars can help you lease space, grow your network, and stay plugged into the pulse of the market. Go find your “mayor” and make a

Read More

Create Good Karma with Drinks

In retail leasing, your competition is NOT your enemy—in fact, they might just be your next best source of leads. The stronger your market performs as a whole, the higher the rents for everyone. So why not make friends with your fellow leasing agents? Here’s how: Host or join a quarterly meetup with other leasing pros in your area. Coffee, breakfast, lunch, happy hour—your choice. Just make it consistent and collaborative.Call it something fun! Think: Retail Leasing Lunch Bunch, Coffee with the Competition, or The Competitive Cocktailers.Share intel. Talk rent comps, pass-throughs, square footages, availabilities, challenges, and even exclusives (trust me—your “no-go” tenant may be their next best deal). Can’t find a group to join? Even better—start one! Just look at the leasing signs in your market, pick up the phone, and invite the agent for coffee. And if they don’t call back? Sweeten the invite. Let them know you’ve got a market study to share, or maybe even a few leads they can’t pursue but you can. Remember: Sharing = Karma. Good vibes build great relationships—and strong relationships lease space. Let’s lift each other up and raise those rents. One cup of coffee (or cocktail) at a time. Cheers!

Read More

Beth's Resources

Beth has established a reputation for “giving back” and creating a legacy of helping others. To support this mission, she offers a wealth of FREE resources for individuals in the retail leasing industry, whether you’re a newcomer or a seasoned professional. Her collection includes case studies from her nearly 40 years of experience, providing practical insights and guidance. With Beth’s resources, you’ll gain valuable tools to navigate the complexities of retail leasing and achieve your professional goals.

E-News

Subscribe to the Beth Azor e-news to stay up to date with commercial real estate trends, events, and expert advice.

We promise, no spam. Just great content.

E-News

Subscribe to the Beth Azor e-news to stay up to date with commercial real estate trends, events, and expert advice.

We promise, no spam. Just great content.