Commercial Real Estate Terms #2: Revving It Up with Retail
Welcome to our second edition of commercial real estate (CRE) terms and definitions blog series! This month, we are exploring different types of retail spaces as we anticipate the upcoming holiday-filled fall and winter months. Let’s jump right in!
Anchor Tenants
When you’re driving past a strip mall or shopping center in Athens, do you ever notice that stores such as Kroger or Publix have larger signs than others located in the same plaza? These stores are known as anchor tenants, the largest tenant in a shopping center. According to NAIOP, rent for anchor tenants is often significantly lower than it is for other tenants in the shopping center because they draw customers to the center.
Big Box
Freestanding structures that are occupied by a category-dominant retailer are often referred to as “Big Boxes.” Oftentimes, retailers such as Best Buy, Home Depot, or Lowe’s are located in Big Box retail buildings. According to NAIOP, Big Box spaces for industry-leading retailers such as Best Buy, Home Depot, and Lowe’s can range from 250,000 to 600,000 square-feet. For other retailers, these spaces are typically a minimum of 40,000 square-feet. An example of a Big Box retailer in the Athens area would be Epps Bridge Centre.
Community Shopping Center
If you are someone who enjoys a weekly Target or T.J. Maxx at Beechwood Shopping Center run, you are visiting a community shopping center. Community Shopping Centers feature retail properties that offer a wide range of apparel and general merchandise like Academy, Belk, or Dillard’s. Other department stores like Walmart also call these spaces home. Community Shopping Centers typically range from 125,000 to 400,000 square-feet, with a primary trade area of three to six miles.
Convenience Shopping Center
Similar to strip shopping centers, convenience shopping centers are usually laid out in a straight line rather than an L or U shape. More often than not, they are the smallest type of retail building with less than 30,000 square-feet. Convenience shopping centers provide a limited mix of goods or services and serve a small trade area.
Experiential Retail (Retail-tainment)
Experiential Retail buildings are unique retail spaces that offer an experience to make the visitor’s experience more engaging and enjoyable. Examples of this include Bass Pro Shop‘s massive aquarium, Disney Store‘s play spaces, or Nike offering a pair of shoes exclusive to a specific location. NAIOP says that “retailers will curate an experience aligned to the brand ethos.” Other experiential elements that these spaces may host include activities, games, or educational classes related to their products.
Freestanding
Freestanding retail buildings are incredibly commonplace across communities. These spaces are retail structures that are stand-alone and not part of a complex. Like some Big Box spaces, these are typically a minimum of 40,000 square feet with surface and/or street parking spaces. In Athens, Georgia, examples of freestanding spaces include Classic City Bank, Chick-Fil-A, and Showtime Bowl.
Kiosk
According to NAIOP, Kiosks are small, physically independent stands or carts that are often placed within the common area of a retail structure, such as regional malls. Specialty goods are typically sold or returned at these kiosks. Examples of kiosks commonly found at malls include Kylie Cosmetics and Sephora.
Locker
Lockers are storage compartments that allow customers to pick up their merchandise at a satellite location, a type of self-service parcel delivery. NAI Global says that “customers can select any locker location as their delivery address and retrieve orders at that location by entering a unique pickup code on the locker touchscreen.” Examples of retailers that provide locker pick-up include Amazon and Verizon.
Omnichannel Retail
Omnichannel Retail spaces are becoming increasingly popular as online and brick-and-mortar retail operations merge. This allows retailers to interact with their customers on multiple channels, including buy online and return in store (BORIS), buy online and pick up in store (BOPIS), as well as others. If these stores have mobile apps that include identification of in-store items, they can also fall under the Omnichannel Retail category. Large retailers including American Eagle, Dick’s Sporting Goods, Old Navy, Target, and Walmart are omnichannel retailers.