Retail shopping centers are an important asset class of commercial real estate (CRE), even during the post-lockdown era that has seen significant closures of some retail businesses. These centers play a vital role in communities, providing economic stability and social cohesion, as well as excellent opportunities for investors.
We asked retail leasing experts, Ryan Edwards & Diane Lawson, to provide their insight on the perfect formula for a retail shopping center. And that key to success? Pairing the right anchor store with its allies – small, local businesses. This is where commercial real estate agents can add significant value to both landlords and tenants. By understanding market dynamics, attracting anchor stores, and nurturing smaller establishments, agents contribute to a thriving ecosystem that benefits the community and businesses alike.
Attracting Anchor Stores
Anchor stores, renowned businesses with established brand recognition – think Publix, Winn Dixie, Lowes – play a pivotal role in drawing significant foot traffic to retail centers. Their presence in a plaza acts as an anchor, ensuring long term success and loyal customer base through longer term leases and brand recognition.
Commercial real estate agents, who hold strong relationships with store representatives, local economic development organizations, and community leaders, can be extremely valuable in securing these anchor stores. By conducting comprehensive market analyses, agents can identify suitable candidates to target.
With suitable retailers in mind, agents can further entice anchor stores to move into the shopping center by working with the landlord to offer favorable lease terms, financial incentives, strategic locations, and customized store designs aligning with the retailer’s brand.
Nurturing Small Businesses
While securing an anchor store ensures a high volume of traffic with long term leases, what makes a shopping center unique from the competition with other national anchor stores, is a unique set of small businesses.
These small, independent businesses furnish the center with local character, authenticity, and distinct shopping experiences that cannot be found anywhere else. Despite their shorter leases and high turnover rates, the niche offerings and dedicated customer base can lead to higher returns on investment.
With a thorough network of local business owners as well as highly specific resources, commercial real estate agents can promote the entrepreneurial spirit by connecting the right business owner to the space where both the business and plaza will provide value to each other.
Striking a Balance
Achieving the right balance between anchor stores and small businesses is crucial for a thriving retail ecosystem. Commercial real estate agents play a pivotal role in fostering this balance. By understanding the value each brings, agents can facilitate an environment where anchor stores attract customers and bolster the smaller businesses nearby.
The equilibrium not only promotes economic stability but also maintains the center’s local character and encourages competition, benefiting the community as a whole.
Retail shopping centers hold great potential for landlords and businesses alike, and commercial real estate agents can help maximize this potential by securing an anchor store and its allies, who will work together to create a thriving retail ecosystem.