When you have a neighborhood center with a national department store, grocery/drug store, you could call it an anchored center. But, I am underwriting a neighborhood center where you have a newer local arcade/play space for kids that occupies 25% of the center and then next you have wells fargo bank, autozone and dollar tree each individually occupying 8% each. While these are credit tenants-they occupy a smaller percentage of the center compared to the local arcade that is not a credit tenant. Would you still call this an anchored retail center? Thank you!
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if you think the arcade is drawing people to the center. Are the people then visiting the smaller tenants afterwards? if you believe so, then you can make a good argument that is is a anchored retail center
What space composition makes up the remaining 51% of (presumably) unoccupied space?
Small service oriented tenants like gyms, nail salons, dental clinics and restaurants. None of these tenants occupy more than 6% of NRA each. Well occupied and very granular rent roll if you take out the arcade that occupies 25% of the space.
Let's put it this way..... If you presented this to an investment committee and tried to pitch it as an 'anchored center' you'd probably get laughed out of the room.
That was my first reaction too, but being in a tier 1 market puts me in a bubble though. For me, when I think of an anchor I think of a national retailer that draws in traffic. But in Bobtown, Texas, would Bob's BBQ- a regionally popular BBQ joint that occupies 25% of the NRA be an anchor if its the largest tenant and if its the biggest draw for the center? So, thats what is confusing to me, whether the definition of an anchor vary from market to market.
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