Andrea Christensen assists Brookfield Properties, City Center's landlord, with the mall's major makeover. While City Center, 33 S. 6th St., appears to be on life support - with boarded-up storefronts and recent closings - Christensen works behind the scenes to find new tenants geared toward basic services and convenience.
Christensen talked with Skyway News about how she sells Downtown commercial space.
How do you do your job?
Seventy-five percent of my job is education. Because, first of all, I can call people and they may not have thought of Downtown, but they don't understand Downtown and they don't know about Downtown, so I need to educate them on this market. If I'm successful at educating them and they have an understanding of it, then hopefully a deal will come of that.
It's important that I have as much data as possible on traffic counts, business buyers, number of employees in buildings, number of people in a four-block radius - that kind of thing. How many condos are being built right now and how many are coming online - the demographic of who's moving Downtown - because those are the things that sell Downtown and give it its energy.
A big part of the job is having that information and giving it to them in a way that's easy to digest, because people you're trying to lease to are very, very busy. So the more information I have, the less they have to gather.
Downtown is a very funny market because it's a different market every three blocks you go. For instance, you don't see people going across Hennepin Avenue to go eat lunch. They head towards Nicollet. It's like in the suburbs when you have a bridge or you know there's certain marks for some reason people psychologically won't cross. It's a psychological thing, but watch, you don't see people crossing Hennepin. Now you'll see people in 1st Avenue and the Warehouse District cross Hennepin Avenue to come into the core, but you don't see the reverse. It's understanding these little idiosyncrasies that creates the value for what I do.
You also don't see it when you're on Nicollet Mall. You don't see people who are on the Nicollet Mall walking over toward Marquette. Everyone gravitates toward Nicollet Mall.
Is it getting easier to sell Downtown?
You know what, I think it is easier and I think part of it is again having the knowledge base. I think that is one thing in convincing people - being prepared in your presentation. I think it's easier for me because I have such a passion for Downtown - I live Downtown and work Downtown. I love Downtown and would never move out of Downtown.
But I also think that occupancy rate is bouncing back. I think the residential component is huge in convincing people. In terms of food and other things - when you have 17 movie theaters Downtown that weren't here three years ago - that brings people in.
Just the density of our building has gone up so much. They just leased 200,000 square feet to Target - that's a lot of bodies.
What are some of the challenges in trying to lease Downtown?
One of the hard things about Downtown is it's more expensive to construct. You just have different challenges when you're in a high-rise office building than you do if you're in a strip center. It's harder to figure out how to vent restaurants. It's a different animal - you have to overcome that and work through those construction issues. Once you get into spaces, sometimes you find things you didn't know where there.
How can you tell if a business is going to make it?
I talk to all the employees in the restaurants - all the bartenders, all the wait staff and I quiz them - how's business? How are you doing? What's the word on the street? Who is doing well - who's not?
What are you hearing now?
One of the surprising thing to me is that light rail has been really good for everybody's business - even Neiman Marcus is happy. I rode the light rail from Mall of America to Downtown in December and it was packed - you couldn't get another person on it. It's educated, higher-income people who are on that. That's been huge, and I've seen a lot of families come Downtown.
Another thing about the Warehouse District is that 1st Avenue has really become a young person's spot to drink. Food is secondary. Drink is first. Whereas you come over on Nicollet Mall and it's an older, more sophisticated crowd where the food is equally as important. When you look at the price of the drinks, it's completely different. When you look at Ike's and Zelo's - they're a pretty strong price point.
What are some of the business concepts that will work now Downtown?
If you're retail, one thing that's important is timeliness.
I mean people need to get in and out. I know that Target has been big on that - they can't have lines. People have a finite amount of time. That is one of the challenges - you have to be at the top of your game because you do so much business in a very small period of time. Jimmy John's is a perfect example of people who get it. They have two lines that meet in the middle. Their goal is that by the time you pay, your sandwich is done.
I also think that one thing we're a little low on Downtown is gift shops. When you think about it - birthdays, you have going away parties for co-workers, celebrations of promotions - and you're always looking for gifts for that and nobody really capitalizes on that. That's something we really want to get down here.
What about a grocery store? Why do deals take so long?
We're engaged with a grocery store, but those deals take a long time - they could fall a part at any point. Their construction is tricky and then the construction Downtown in this building is tricky - so that's part of it. Their build-out is so expensive. You really have to get a firm handle on that cost because that's going to make or break whether they make money Downtown.
People were concerned about Lunds. It doesn't matter because people working in the core are not going to stop at that Lunds - it's the wrong direction. To get there during rush hour would cost you a lot of time.
To quote a person we're engaged with, 'The customer Downtown is a briefcase and one bag.' I think that sums it up. The big thing Downtown is going to be service and entertainment.
What about businesses geared toward residents?
I think that's a huge part of the puzzle - I really do. It's not just that people are moving in. It's the dream customer because these are people who don't have children. They're either empty nesters or single professionals and they have a lot of discretionary income to do what they want with.
One thing that Downtown restaurateurs have been slow to comprehend is that people who live Downtown are very, very social, and are out a lot. When your business is slow on nights there's not conventions or Sunday nights or Monday nights, I think they have done a poor job of trying to reach those [residents]. I think they need to reach out to that market so they can increase their revenue on slow nights. Friday and Saturday nights they have all the business they need. When there is a Timberwolves game, they have all the business they need.
So how do you get the customer in your seats on the slow nights? I think they need to reach out to that residential population and say, 'Come in Sunday nights and it's 20 percent off if you live in this zip code.' I think they could do a good job of creating an untapped market for them.