Anchor tenants are the largest or most prominent stores in a retail location. They help draw customers into the area either because they have unique items or they’re a well-known name. In strip centers, anchor tenants are often big-box stores like Target, Wal-Mart or grocery stores. In shopping malls, they’re more likely to be department stores like JC Penny or Macy’s.
A big-name tenant can help lesser known tenants to establish credibility and help landlords trying to fill vacancies. Anchor tenants validate the area as an ideal place to do business for consumers.
The success of a commercial project depends on multiple factors, such as location, construction quality and amenities. Getting an anchor tenant is important for any commercial location, in order to lure other tenants and make the project a success. The anchor tenant brings immense value to a shopping center and increases the attraction of the property. A major tenant’s presence can put an otherwise little-known neighborhood on the map or vastly change the character of an area.
Anchor tenants that perform positively impact the other shops in the mall. They’re typically responsible for much of the foot traffic flowing through the property and as a result tend to get discounted rental rates with landlords.
While mom and pop stores might worry that potential customers will walk straight past their company in favor of the bigger name, that actually isn’t usually what happens. For instance, a family may decide to go grocery shopping at a strip mall, get a quick bite to eat at a casual restaurant there, and then pick up medication at the pharmacy, all without leaving the shopping center itself.
One of the major benefits of having an anchor tenant in a retail development is the massive boost in credibility it provides. For example, if potential tenants know that a Walmart or a Target is moving into a strip mall, they’re far more likely to feel comfortable signing a long-term lease there.
All in all, it’s important to recognize the influence that bigger named stores can have on other tenants and surrounding areas. Smaller shops will be looking for anchor stores to boost foot traffic and establish credibility which will, in turn, increase their profitability.