JLL Grocery Report 2025

https://www.dropbox.com/scl/fi/x1l5gulrppabj1notnm3g/JLL-Grocery-Report-2025.pdf?rlkey=e3y7tp9cja7a2obdza633bcde&st=iqszp1in&dl=0

• Resilient Market Performance—Grocery-anchored retail continues to thrive despite economic uncertainties, with strong tenant demand, rising rents, and historically low vacancies (3.5%).
• Investor Demand Remains Strong – Investment volume in grocery-anchored retail surpassed 2023 levels, signaling confidence in the sector’s stability and growth potential.
• Retail Space Scarcity Driving Value – Limited new supply and high competition among expanding grocers are pushing rental rates higher, benefiting landlords.
• Expanding Grocery Footprints – Leading grocers like Aldi, Publix, and H-E–B are aggressively opening new stores, fueling demand for well-located, grocery-anchored properties.

Green Street Market Reports 2024

https://www.dropbox.com/s/ofh2mcvl75dqrml/2022%20U.S.%20Market%20Outlook_CBRE.pdf?dl=0

• Retail Insights Report – Grocery Chronicles (2/185/24).
• Quick Take:  Kroger & Albertsons Divestiture Plan Update (4/22/2024).
• ICSC Retail insights (5/22/24).

CBRE U.S. Real Estate Market Outlook 2023 – Chapter 5

https://www.cbre.com/insights/books/us-real-estate-market-outlook-2023

• More Redevelopment Projects:  With new construction remaining cost-prohibitive, retail developers and investors will focus on redesigning and redeveloping existing space to attract more shoppers. This will be especially true in prime trade areas, which are experiencing record-high occupancy levels and asking rents due to strong demand. Some of this redevelopment activity will involve conversions to other uses, such as office, industrial and residential.
• Rise of Grocery Stores:  The role of grocery stores will continue to evolve. Although food & beverage digital sales are rapidly growing, most of these orders are fulfilled at the store level through curbside pickup or third-party delivery. Grocers will transform their footprints to better suit multi-channel retailing.
• Opportunities in Select Markets:  Retailers will become more active in tertiary markets that have recently seen an outsized level of net migration, allowing them to build brand awareness at lower operating costs.

CBRE U.S. Market Outlook Report 2022

https://www.dropbox.com/s/ofh2mcvl75dqrml/2022%20U.S.%20Market%20Outlook_CBRE.pdf?dl=0

• Grocery-anchored retail assets were resilient during the pandemic.  This sub-sector adapted quite well to online innovations such as curbside pickup and third-party delivery services.  Grocery-anchored centers will remain the gold standard of retail investments.
• With grocery-based e-commerce expected to grow by more than 20% in 2022 and double by 2025, grocery-anchored centers will remain the gold standard of retail investment

Placer.ai – Brick-and-Mortar Grocery’s Ongoing Resilience (10/2022)

https://www.dropbox.com/s/0q5vxeot4ap7wyn/Brick-and-Mortar%20Grocery%E2%80%99s%20Ongoing%20Resilience%20White%20Paper%20By%20Placer.ai%20October%202022.pdf?dl=0

• 92% of all ‘grocery’ sales will be fulfilled through local store(s).
• Consumers will still be eating at home at a higher rate for 2021 than they were pre-pandemic.
• Many leading grocers have found ways to thrive and continue driving visit growth despite the challenges.
• Despite the challenges the grocery sector faces three quarters into 2022, the industry has shown impressive resilience.  This white paper takes a closer look at some of the factors keeping the space thriving through the uncertain times.

The Beat – Grocery Store Statistics (1/2022)

https://www.thebeat925.ca/news/455955/the-average-person-spends-two-hours-a-week-at-the-grocery-store

• The average person will visit a grocery store three times a week and spend nearly two hours a week shopping for groceries. An additional 41 minutes is spent commuting to and from the store on each visit. And the most popular time to go to the grocery store is at 12:53 on Saturday afternoons.

CBRE 2019 Food in Demand Series

https://www.dropbox.com/s/ow3d8abj17a41qr/US%20Retail%20Food-In-Demand-Grocery-Report%20May%202019.pdf?dl=0

• Grocery-anchored assets’ overall stability, their resilience to economic downturns and their relatively low e-commerce penetration rate ensure reliable traffic and sales.  This has made grocery-anchored shopping centers a favorable investment class in what many investors perceived as an uncertain retail environment.

FMI.ORG

https://www.fmi.org/blog/view/fmi-blog/2019/07/24/comparing-grocery-shopping-brick-and-mortar-vs.-online

• This year’s report finds consumers visit a grocery store 1.6 times a week, which is consistent with the trend of the past several years.

FMI.ORG 

https://www.fmi.org/blog/view/fmi-blog/2019/07/12/how-many-grocery-stores-did-you-shop-at-last-month

• This year’s U.S. Grocery Shopper Trends report found that the average shopper visits 4.4 different retail banners in a typical month…
• Importantly, we find younger generations are visiting the most food retailers a month. Gen Z visits 6.2 retailers per month and Millennials visit 5.0 retailers per month to meet their household grocery needs.

CBRE 2019 Food in Demand Series

https://www.dropbox.com/s/ow3d8abj17a41qr/US%20Retail%20Food-In-Demand-Grocery-Report%20May%202019.pdf?dl=0

• Grocery-anchored strip or neighborhood centers have suffered fewer vacancies than power centers and malls; they currently boast the highest occupancy rates of all shopping center types.
• Online grocery share will reach between 5% and 10% by 2022 and will fundamentally alter but not replace the store.

IHL Group 2019

https://www.dropbox.com/s/5mjztgkuhcmvhto/2019-Retail-Renaissance-Report-v4.pdf?dl=0

• The news headlines on closings really focus on a very small number of retailers and segments that are concentrated in the mall base stores.  As we will see later, 20 retailers represent 75% of the total number of store closings.  Instead, store counts are on track to grow by 2,965 in 2019.  The areas with the negative store counts are heavily focused on malls, namely Department Stores and Specialty Softgoods.
• Food, Drug, Convenience, and Mass Merchants/Warehouses had a 9.5 companies adding stores for every one that decrease stores.  275 companies had net store growth and 29 had net store decrease in 2019.

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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.

7 Types of Retail Shopping Centers

• Malls
• Lifestyle Centers
• Factory Outlets
• Power Centers
• Community Centers
• Neighborhood Centers
• Convenience Centers

Malls

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.

Lifestyle Centers

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.

Factory Outlets

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.

Power Centers

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.

Community Centers

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.

Neighborhood Centers

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.

Convenience Centers

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.

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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In general, real estate is an important asset class to hold in your portfolio due to its tax benefits and inverse relationship to the stock market, as we have consistently seen that real estate rental income often rises as the stock market declines.

There really is no right or wrong answer as to whether active or passive investing is better. It all depends on your goals, time commitment, and how willing you are to learn and put in the needed effort to make active investing work for you.

What is Active Real Estate Investing?

Active real estate investing is when you directly own and operate a real estate asset or real estate portfolio. This typically involves sourcing the property to buy, negotiating the terms of the purchase, and obtaining financing and equity commitments needed to close on the property. After that, the investor is responsible for finding tenants, negotiating lease terms, collecting rents, and finally handling any repairs and maintenance needed on the property.

Many people can successfully manage one or two residential properties on a part time basis, but when buying multiple assets and creating a large real estate portfolio, it will quickly turn into a full time business.

It may seem like running a real estate business would be easy, but when scaled, it can get very difficult and time consuming. In order to be successful, a property owner needs to develop solid professional relationships with the likes of contractors, vendors, lenders, real estate agents, and other professionals. That, coupled with dealing with tenants and maintenance issues quickly adds up to a time consuming job.

While active real estate investing does take a lot of time and effort, there are plenty of advantages. History has proven it is almost always a growing asset class. In addition to the appreciation and rental income, real estate comes with some tax advantages that are generally unavailable with other asset classes, especially when actively managed.

What is Passive Real Estate Investing?

          Passive real estate investing employs more of a “hands-off” management strategy. Think of it as an investor outsourcing their real estate management to a professional manager and pays the manager for their service and a portion of profits for their professional service.

There are several ways to invest in passive real estate including publicly traded and non-traded REIT, private real estate firms, crowdfunding, etc.

Another way to invest passively in real estate is through a private real estate syndication. In a real estate syndication, you invest in a real estate deal with many other investors typically through a Limited Liability Company or LLC.  This LLC helps protect the real estate investor from potential liability associated with operating the real estate.  With a syndication, even though the investment is passive for the limited partners, the investment project as a whole is actively managed. Because it is managed by a professional real estate development firm, the investment gains can be significantly higher than most other passive investments.

Tri-Land Properties is a commercial real estate developer that focuses on grocery anchored real estate. We believe that passive real estate investments are the better choice for most people because of the enormous knowledge and time it takes to become a true real estate professional. By investing with Tri-Land, an accredited investor can have access to institutional grade grocery anchored real estate investments run by a 40+ year successful real estate company. To learn more, please contact RJ Johnson at Tri-Land Properties.

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Tri-Land Properties sold a neighborhood retail center anchored by Kroger and Ross Dress for Less in Indianapolis, Indiana.

First National Realty Partners acquired Southern Plaza from Tri-Land Properties who was represented by Prodigy Real Estate Group Co-Founder, John May.  This 266,000 square-foot, neighborhood shopping center is anchored by a high-performing Kroger in the growing Indianapolis market of Indiana. Some of the other tenants at the property include Ross Dress for Less, Harbor Freight, Oak Street Health, Goodwill, rue21, Qdoba, CosmoProf as well as others. Additionally, the property has approximately 60,000 square feet of retail space available for leasing.

Located at 4200 & 4202 S. East St., Southern Plaza is located approximately 5 miles from downtown Indianapolis at the intersection of Interstate 465 and US-31 (East Street).  Traffic counts exceed more than 140,000 vehicles per day and is showed anchored by AMC Indianapolis 16+ IMAX theater.

About Tri-Land Properties

Established in 1978, Tri-Land Properties is a Chicago-based owner/operator with a deep history of value-added redevelopment, best known for its high-quality repositioning of existing underperforming retail shopping centers. The real estate strategy focuses on necessity-based assets (grocery/drug anchored), in infill locations in major Midwest, Mid-Atlantic and Southeast markets. The company has an established, vertically integrated platform, with a full complement of real estate operating capabilities. For further information, visit www.TriLandProperties.com

About First National Realty Partners

First National Realty Partner (FNRP) is a real estate private equity firm that seeks to identify and invest in high-quality retail assets.  The company was founded by Anthony Grosso and Christopher Palermo, two experienced institutional real estate professionals, and is headquartered in Red Bank, New Jersey.  According to their website, “We are uniquely equipped to provide our investor-partners with best-in-class investment opportunities and white-glove service. We’re poised to offer our national-brand tenants access to exceptional markets. And we’re excited to be able to offer our team limitless career advancement and earning opportunities.” For further information, visit www.fnrpusa.com

About Prodigy Real Estate Group

Prodigy Real Estate Group is the result of the January 2020 merger of two of the Midwest’s most respected real estate firms – May Real Estate LLC and Jerome H. Meyer & Co. The firm specializes in real estate brokerage and management services. For further information, visit www.prodigyreg.com

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The sporting goods and outdoor recreation retailer is expanding its footprint in Florida with its first locations in the Tampa Bay area. Academy will open at The Shoppes at Park Place in Pinellas Park in winter 2022 and at Cypress Creek Town Center in Wesley Chapel in 2023, giving it a total of 15 locations in the Sunshine State.

Additionally, Academy plans to open its first stores in Virginia and West Virginia later this year.

In April, Academy opened its first new store in two years, at Salem Gate in Conyers, Ga. The company has set a goal of opening 80 to 100 stores during the next five years. Currently, it has 260 stores across 16 states.

The new locations will carry a wide range of sports and outdoors products from top brands that include Nike, Adidas, Columbia, The North Face, Chubbies, Costa and Under Armour. The assortment also features Academy’s private label brands such as Magellan Outdoors, Freely, H2O Xpress, R.O.W., BCG and Mosaic.

Customers can also take advantage of a suite of in-store services that will include free assembly on grills and bikes, scope mounting, bore sighting, line winding/spooling, propane exchange and the ability to purchase hunting and fishing licenses.

“The Tampa Bay community can expect to find all the products they need for their sports and outdoors passions when they walk into our store, ” said Sam Johnson, Academy’s executive VP of retail operations. “Tampa Bay is not only known for its enthusiastic sports fanbase but also boasts renowned fishing, beaches and outdoor activities.”

Source:  https://chainstoreage.com/first-look-academy-sports-outdoors-opens-its-first-store-two-years

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JLL Capital Markets closed the sale of the neighborhood retail center shadow anchored by Kroger in Smyrna, Georgia

 JLL Capital Markets announced today that it has closed the $18.2 million sale of The Crossings at Four Corners, a 59,987-square-foot, neighborhood shopping center shadow anchored by a high-performing Kroger in the growing Atlanta-area community of Smyrna, Georgia. JLL marketed the property on behalf of the seller, Tri-Land Properties. LBX Investments purchased the asset.

The Crossings at Four Corners is a dynamic neighborhood with a well-curated tenant mix and is shadow anchored by one of the highest-performing Kroger stores in the Atlanta MSA. Some of the other tenants at the property include Pet Supplies Plus, DaVita Dialysis, America’s Best Vision, SuperCuts, Papa John’s, WingStop, LaVida Massage, Pita Mediterranean, Brighten Your Smile and Phenix Salon Suites. Additionally, the property included approximately 4.81 acres available for future development to add up to 35,000 square feet of retail space.

Located at 3240 S. Cobb Rd., The Crossings at Four Corners is in Smyrna, which is one of the fastest-growing submarkets in the Atlanta MSA due to its proximity to major economic drivers, including Dobbins Air Force Base, The Home Depot HQs and the Battery – a $1-billion mixed-use and entertainment district.

The JLL Retail Capital Markets Investment Sales and Advisory team representing the seller was led by Managing Director Brad Buchanan, Senior Managing Director Jim Hamilton, and Associate Andrew Kahn.

“The Crossings of Four Corners is a dynamic retail asset and was extremely sought after by investors due to the property’s well-established tenant base, ability for future development and being shadow-anchored by one of the highest-performing Kroger stores in the Atlanta MSA,” Buchanan said.

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment and sales advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

About Tri-Land Properties

Established in 1978, Tri-Land Properties is a Chicago-based owner/operator with a deep history of value-added redevelopment, best known for its high-quality repositioning of existing underperforming retail shopping centers. The real estate strategy focuses on necessity-based assets (grocery/drug anchored), in infill locations in major Midwest, Mid-Atlantic and Southeast markets. The company has an established, vertically integrated platform, with a full complement of real estate operating capabilities.

About LBX Investments

LBX Investments (LBX) is a real estate investment company that seeks to identify and invest in high-quality retail assets throughout the United States, with a major focus on the Southeast.  The company was founded by Rob Levy and Phil Block, two experienced institutional real estate professionals, and is headquartered in Atlanta, Georgia. The company has experienced rapid growth since being founded in mid-2016 and currently owns and operates 21 retail assets throughout the United States with an estimated asset value approaching $350 million.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion in 2021, operations in over 80 countries and a global workforce more than 100,000 as of March 31, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.

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Private investors are snapping up shopping centers and other bricks-and-mortar real estate, a bullish sign for the beleaguered retail property sector as it emerges stronger than expected from the Covid-19 pandemic.

While many real-estate investment trusts and other big players remain cautious, retail property sales are increasing to family offices, wealthy individuals and small private investment firms. These buyers, who are more nimble than big companies, were responsible for nearly three-quarters of retail-asset acquisitions in 2021, a 30% increase from the 10-year historical average, according to real-estate services firm JLL.

If current trends persist, brokers expect REITs and major institutions to follow these smaller investors to the market. “We expect all of the major capital sources to want to have exposure to retail,” said Danny Finkle, co-head of retail capital markets at JLL.

The renewed investor interest in retail marks a turnaround for a sector that has been struggling to adapt to the rise in e-commerce since before the pandemic.

Retail property transaction volume in the U.S. surged last year to nearly $82 billion, a 24% increase from 2019, according to MSCI Real Assets. The enthusiasm continued in the first quarter of this year, with transaction volume hitting $25 billion by April 30, an 82% increase over the same period in 2021.

Investors are warming to retail partly because of population shifts that favor suburban shopping, as evidenced by the growing popularity of open-air shopping centers. Meanwhile, the retailers that survived the pandemic’s initial lockdowns and surge in online shopping have found many customers still want to shop in person.

The share of e-commerce sales as a percentage of total retail sales has been falling since it jumped at the start of the pandemic. Online sales comprised 14.3% of overall retail sales last quarter, according to JLL, still higher than before the pandemic, but down from 16.4% in the second quarter of 2020.

Many retailers are paying their rent on time, looking to expand and, increasingly, competing for limited square footage. New retail development has been slow since 2009 and the lack of supply has started to push up rents, according to JLL.

Retail investor Time Equities has noticed new and stronger competition, particularly from other private investors and even hedge funds, since late 2020, according to Ami Ziff, the firm’s managing director for national retail. The new bidders are particularly active in bids for grocery-anchored shopping centers and properties in more far-flung parts of the country.

“Things have not only stabilized, but conditions have improved to some of the best fundamentals I’ve seen since 2007, maybe better,” Mr. Ziff said.

Retail property is appealing to investors also because prices and returns remain attractive, especially compared with the favored commercial property types, like warehouses and rental apartments. While nearly all property types are down since the start of the year, retail REITs have outperformed apartment and industrial stocks, according to data from Bloomberg, Nareit and Green Street.

In Port Charlotte, Fla., a small city on the Gulf Coast about halfway between Sarasota and Fort Myers, a bidding war broke out earlier this year over a 140,000-square-foot shopping center anchored by an Office Depot. The center attracted 19 bidders, mostly private investors, and sold last month for $19 million, or 20% more than it was in contract for two years earlier before the pandemic derailed the sale, according to Jim Michalak, managing partner at Plaza Advisors, the broker who represented the seller, a New York-based private-equity group.

The bidding was strong in part because of low retail supply in the area and also because the shopping center’s 83% occupancy rate and Office Depot’s plans to depart by next year offer new owners the opportunity to add higher-paying tenants. Mr. Michalak said that the buyer is confident that retailer demand is strong enough to fill the space at attractive rents, with two possible tenants already considering the anchor location.

“Private investors have migrated to acquiring shopping centers because of better yields, compared with other real estate,” Mr. Michalak said.

Investing in retail remains a risky business. Rising interest rates are tanking some deals, and overall commercial property sales were down 16% in April, compared with the same month in 2021, after 13 straight months of increases, according to MSCI Real Assets.  But Mr. Finkle and others said they expect retail assets will continue to attract capital. “I think people are trying to understand if a recession is coming and what will be the extent of inflation,” he said. “But, so long as retail fundamentals continue to perform, investors will continue to invest in retail assets.”

Write to: Kate King at Kate.King@wsj.com

WSJ LINK: https://www.wsj.com/articles/private-investors-buy-up-retail-real-estate-as-bigger-players-remain-cautious-11655208001?st=e93ys7aqhqluqmf&reflink=article_email_share

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