Retail
Retail property types range from single-tenant buildings, such as Walgreens, to large mega-malls. High-rise buildings are almost never used solely for retail; instead, only a portion of a high-rise building, typically at ground level, will be used as a retail component. Retail centers that have more than a single tenant are grouped by size and tenant type. The International Council of Shopping Centers (ICSC) the largest retail industry organization in the world, defines different types of shopping centers as follows:
Malls: A mall is one of the most iconic types of retail real estate and is generally a large, enclosed building that houses a large number of stores under a single roof. Tenants within shopping malls typically consist of large department stores, specialty retail, apparel, a food court with fast-food options, and larger sit-down restaurants. The large department stores and sit-down restaurants typically serve as the “anchor” tenants that draw consumers into the mall.
Community & Neighborhood Centers: These centers include a mix of general merchandise or convenience-oriented tenants. Oftentimes, these centers are “anchored” by a big box retailer such as Target, Walmart or a grocery store. These centers might range in size from 30,000 to 400,000 square feet.
Strip centers: Strip Centers are a group of stores arranged in a row that share a parking lot and sidewalk. Most Strip Malls face roads with significant traffic and are usually self-contained. Many Strip Malls range between 125,000 square feet and 400,000 square feet of gross leasable space.
Power centers: These centers are dominated by “big box” retailers such as Best Buy, Dick’s Sporting Goods and Home Depot with only a few small tenants.
Lifestyle Centers: A lifestyle center is a shopping center that combines the traditional retail functions of a shopping mall with leisure amenities. Lifestyle centers can also be called “boutique malls” and are generally found in affluent suburban areas. They may not have a large national department store as an “anchor” tenant, but rather house a variety of known upscale brands.
One of the most important aspects of the retail subtype is its dependency upon traffic and parking. Urban retail spaces, which usually are a portion of a mixed-use building rather than a single-use building, rely heavily upon foot traffic, while strip centers rely heavily upon vehicle traffic. Lifestyle centers, on the other hand, will create their own traffic because the anchor tenants are usually “destination tenants,” such as movie theaters and restaurants. Except for the most densely urban locations, almost all retail tenants require certain minimum parking to square footage ratios in order to lease space.