Better yet, what is the definition of a retail shopping center? Retail properties all have the same end goal, to sell products to consumers. How each retail center is constructed or designed may vary in size, shape and format. There is not a one-size-fits-all approach to retail real estate when it comes to evaluating which type of retail center would benefit best in a particular location. The following list was consolidated from International Council of Shopping Centers, better known as ICSC, report dated January 2017. This list was designed to answer the question of what is a mall or shopping center or retail center.
Malls are located throughout the US and are designed primarily as open-air or enclosed malls. Actually, the majority of malls are enclosed malls whereas all tenants are under a single roof. The ICSC report identifies two primary types of malls including Super-Regional and Regional Malls. For the ease of understanding the basic retail asset’s I think we can put these two malls in the category.
Malls are often anchored by two or three apparel anchors or a movie theatre. They typically feature many apparel tenants as well as restaurants (or food courts if more vintage in nature). The gross leasable area, or GLA for industry veterans, starts usually in the 400,000 square feet range and will go as high as over 1,000,000 square feet.
|Trade Area Size||5 – 25 miles|
|Acreage Range||60-120 Acres|
|% of Industry GLA||14.9%|
|Typical GLA||400,000 – 1 million+ SF|
Lifestyle centers gained popularity in the early 1990’s, according to Wikipedia, and were first label by Poag and McEwen. These retail centers usually cater toward upscale consumers providing a higher-end shopping and dining experience than your typical mall. These assets are usually located in affluent suburban areas and many times are open-air retail centers.
|Trade Area Size||8 – 12 miles|
|Acreage Range||10-40 Acres|
|% of Industry GLA||2.2%|
|Typical GLA||150,000 – 500,00 SF|
As defined, factory outlets are stores that sell factory-made goods direct to consumers for less than current retail price. In reality, these outlet stores are usually more of an open-air mall which is providing name brand apparel and discounted housing goods. They are considered destination retail outlets given the large trade area size. The draw to factory outlets is the name bands sold at a discount.
|Trade Area Size||25 – 75 miles|
|Acreage Range||10-50 Acres|
|% of Industry GLA||1.2%|
|Typical GLA||50,000 – 400,00 SF|
Power centers are commonly known as “big box” locations. These retail centers will typically be leased to discounters, home-improvement retailers and large specialty chains. Across the US, you will likely find many of the same “big box” retailers clustered together. Just think of Lowe’s, Sam’s Club, Best Buy, and Bed Bath and Beyond. Another good example is Home Depot and Walmart. It is highly likely that you will encounter many of the national fast-food chain restaurants within close proximity of these Power Centers.
|Trade Area Size||5 – 10 miles|
|Acreage Range||25-80 Acres|
|% of Industry GLA||13 %|
|Typical GLA||250,000 – 600,00 SF|
Community centers are larger versions of a neighborhood center and will typically offer a wider range of apparel and other soft goods than a neighborhood center. A community center may have three or more anchors (or junior anchors) whereas a neighborhood center typically will have a one or two. It is common for a community center to have a grocery store as well as many other day-to-day necessity tenants.
|Trade Area Size||3 – 6 miles|
|Acreage Range||10-14 Acres|
|% of Industry GLA||25.4 %|
|Typical GLA||125,000 – 400,00 SF|
The most common and recognizable retail real estate in the US is the Neighborhood Center. This is your typical grocery anchored strip mall that serves the immediate population within a 3-mile trade area. Neighborhood center retailers typically cater to day-to-day needs of the community. Tenants in neighborhood centers would likely include grocery stores, pharmacies or drugstores, banks, hair and nail salons, some medical providers such as eye care or dentistry and much more depending on the community. A good example of a neighborhood center is The Hub Shopping Center.
|Trade Area Size||3 miles|
|Acreage Range||3 – 5 Acres|
|% of Industry GLA||30.8 %|
|Typical GLA||30,000 – 125,00 SF|
Convenience centers are smaller properties that usually service the immediate retail trade area. Think of convenience stores, such as 7-Eleven or other quick service convenience stores that are located in a small retail building usually less than 30,000 square feet. Given their size and location they typically do not have any major retail anchors. A good example of a convenience center is Cherokee South.
|Trade Area Size||< 1 mile|
|Acreage Range||< 3 Acres|
|% of Industry GLA||12 %|
|Typical GLA||< 30,000 SF|
To wrap up, while there are many factors to define a mall or shopping center or retail center, they all have one goal in common. To sell goods and products to consumers. Tri-Land Properties has specialized in the redevelopment of grocery anchored shopping centers since 1978. To learn more about Tri-Land investment opportunities, reach out to RJ Johnson.
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