Retail is Rocking in the Triangle!
There has been a lot of media scrutiny and so much attention given to the demise of brick and mortar retail and as a result, retail real estate in the US. This trend is seemingly confirmed by the domination by online giants such as Amazon, Ebay and Alibaba and the failure of several once prominent industry names such as Sears Holdings, Toys-r-Us and Barney’s (1). But in reality, the situation in retail real estate is a little more nuanced than relying on the obvious conclusion. Major retailers such as Target, Walmart and Best Buy have begun to master final mile delivery allowing them to leverage their huge physical footprint. Local retail businesses especially in redeveloping areas such as downtown Durham, Carrboro, Clayton and Pittsboro (to name but a few Triangle areas) have seen a growing demand for new and redeveloped retail locations as these areas see an increase in interest from consumers.
Here are some typical retail property types.
These are malls that have a handful of anchor tenants surrounded by a wide variety of smaller stores. The average size of a regional mall is nearly 600,000 sf, and is usually enclosed with stores facing inwards, joined by a common walkway. A large portion of the space is a parking space, which usually surrounds the outside of the mall.
The regional mall also offers a significant entertainment component, meant to draw families and teenagers during off-hours and vacation periods.
Super regional malls are similar to regional malls. But with an average size of more than 1.2 million sf, they offer a considerably larger variety of stores and entertainment.
Strip centers are individual stores that form a row and are managed as one entity. With an average size of a little over 13,000 sf, strip centers are smaller retailer properties which may or may not have an anchor. Stores are locally owned and are usually owner-occupied businesses such as nails salons, hairdressers, dry cleaners, or restaurants.
When an anchor store is present, it may be a convenience store or a larger store such as Home Depot or Walgreen’s. The design of an anchor store is either a straight line, “L” or “U” shape. The stores in a strip center are not enclosed and they may be connected via open canopies or walkways.
Large neighborhood centers
The average size of a large neighborhood center is just under 200,000 sf. With an average number of tenants ranging from 15-40, while anchor stores offer general merchandise or convenience-oriented products. Typical stores include drug stores, supermarkets, or large specialty discount stores.
With an average size of just under 72,000 sf, neighborhood centers are purely convenience oriented. With anywhere between 5-20 stores, neighborhood retail centers usually have only one anchor tenant, a supermarket.
A power center features big-box retailers like Staples, Best Buy, or Walmart, power centers average around 430,000 sf in size and has only a few small tenants.
Out parcels are separate parcels of land within or next to a larger shopping center. Usually, the smaller tenants rent them out.
Lifestyle Retail Center
This center features upscale national chain specialty stores. Includes dining and entertainment outdoors; most average around 333,000 sf in size. They are meant to appeal to higher-end consumers.