Good Things Come in Threes
When a client wanted to locate three Dairy Queens in southern Louisiana, one CCIM leveraged Site To Do Business to streamline the site selection process.
Clinton Shepard, CCIM, born and raised in West Monroe, La., relocated to the southern part of the state in 2015 when he joined NAI Latter & Blum. With an expertise in site selection and location analytics, Shepard needed to lean on his knowledge of the area when a client approached him with a proposal: Scout potential locations for Dairy Queens in southern Louisiana and provide three optimal sites for new store development.
First, Shepard had to take a look at the site selection parameters provided by American Dairy Queen. The lot size would need to accommodate a typical Dairy Queen facility with the required parking per city requirements and a drive-thru lane. But the job got trickier when considering the ideal location for a potential store. Any prospective site would also need to include:
- A residential population of 12,500 or more within a five-minute drive.
- A daytime working population of 5,000 or more within a five-minute drive.
- A median household income of at least $40,000, though $50,000 or above would be preferred.
- The ability to acquire drive-thru zoning with a preferred six-car stack between the window and the ordering station.
For much of the process, Shepard, based in Lafayette, had to work remotely with his clients in New Orleans, more than a two-hour drive away. The straightforward presentation of demographic and population data, however, allowed both sides to communicate clearly.
“In screen-share meetings, we got together and both looked at the same maps,” Shepard said. “It was great initially to show him on the Site To Do Business smart maps, for instance, how changes in variables would alter the areas that remain viable. I could show them, 'If we change the income variable, this is no longer available,' and so on. For them, it was helpful because they were focused on incomes in certain ranges. I can set that range, and then change the parameters on household or population density. The client can then immediately see what changes.”
In real estate, no two deals are the same - though in this case, it's true all three deals came with their own challenges. Here's a rundown of how Shepard was able to connect his clients with the ideal properties.
“I knew it was a hot area, and the data from the initial smart map backed that up,” Shepard says. “We found a site close to the interstate, and I pulled general demographic information, income profiles, and traffic counts on the site. The data we found made sense, and the clients liked the site due to the proximity to I-10 and present growth trends.”
The local community was smaller than other potential sites, with only 2,143 people in the immediate surrounding area. But considering the additional traffic coming from the interstate highway, projected annual population growth rate, and a median household income just shy of $100,000, Prairieville offered potential that warranted the clients to revisit their initial must-haves.
“Lafayette was the most challenging,” Shepard says. “It was an obvious choice once we looked at the initial smart map developed by Site To Do Business. But they had another store in this market that we didn't want to cannibalize. I pulled demographic data (including reports showing household density and spending patterns) to show there was plenty of money being spent on eating out in that the area that warranted a second store.”
The site selection process requires the client to have a level of trust in your data collection and decision-making, so the Site To Do Business maps allow me to easily display expertise in providing solutions. - Clinton Shepard, CCIM
Negotiations with the landowner proved more difficult than expected, with the two sides going through several rounds of negotiations over 12 months. After the stops and starts, though, Shepard and his clients closed on the site, and the new store is nearly open for business.
“The final site was similar to Prairieville,” Shepard says. “We used the smart map, homed in on a specific area, and worked with demographic reports and traffic counts to find the ideal site.”
The final site checked all the client's boxes — with a median household income of $76,619 in a densely populated area.
“You're always trying to do as much as you can to have the most ideal site or the highest return on investment for your client,” Shepard says. “Through due diligence and negotiations, I wanted to ensure that the data matched our observations. The site selection process requires the client to have a level of trust in your data collection and decision-making, so the Site To Do Business maps allow me to easily display expertise in providing solutions.”
As an experienced, knowledgeable commercial real estate professional, you want to be able to deliver this kind of value add to your clients. In this case, you have a cash buyer with the funds to cover the $6 million-plus investment. But with positive leverage, you can boost the equity yield, literally doubling the returns for your client.
For more on this topic, check out Site To Do Business for commercial real estate professionals.