Multi-Tenant Retail Expansion: Big Names in Retail Fueling Shopping Center Growth and Opportunity
As brokers, developers, retailers, investors, and more prepare for the industry’s largest event of the year, May 2024’s ICSC Las Vegas, several of the biggest names in retail are sharing exciting plans for growth. These brands will be actively opening new locations and growing their store bases in the coming months and years, including Walmart, Target, and Ross Dress For Less, among others. The growth of these tenants, which typically anchor or shadow-anchor multi-tenant retail centers, could provide lucrative new prospects for players across the commercial real estate industry.
Walmart
Walmart has announced they will build or convert more than 150 "larger format" stores over the next five years and expand existing sites across 47 states and Puerto Rico. This move could benefit surrounding communities and allow shopping center owners and developers to ink new long-term leases.
The addition of a well-known retailer like Walmart is attractive to other tenants who want to capitalize on increased foot traffic. Additionally, with more disposable income as a result of job creation, residents in the community will further strengthen their local economies by shopping, dining out, renting apartments, and more.
Target
Like Walmart, Target is expanding its store count. The eighth-largest retailer in the U.S. will open 300 new locations in the next 10 years, with most of them being full-sized stores that offer a variety of goods and groceries. CEO Brian Cornell says the company will focus on opening stores in trade areas that offer incremental volume and market share.
Target will also upgrade its existing portfolio by adding Ulta Beauty outlets to locations and providing same-day delivery services. This is beneficial news for existing owners of shopping centers as these additions could increase consumer traffic and the overall value of their property.
New larger-size Target stores might also require additional infrastructure to serve customers, including road improvements. Such projects can make the area surrounding these locations more desirable and accessible, increasing the value of existing commercial real estate. New tenants will also be drawn to the area, creating opportunity for additional real estate development.
BJ's Wholesale Club
BJ's plans to open 12 new locations and 15 gas stations in the 2024 fiscal year. Included in these plans is a shadow anchor store that is set to open in Louisville, Ky., near Jefferson Mall in early 2025. As the commercial area builds momentum, developers will have the opportunity to break ground on new projects as other retailers look to capitalize on growth. Each BJ’s opening is expected to add 150 new jobs to their local communities.
Burlington
Burlington is opening around 100 net new locations in 2024, creating exciting real estate development and investment opportunities for those looking to expand their portfolios. As well as its primary consumer groups that tend to be more budget-conscious, the company will continue to target higher-income shoppers as it expands its retail stock.
This growth announcement comes after the company acquired 50 of Bed Bath & Beyond's leases in the summer of 2023, with other retailers such as Macy's, Michaels, and Barnes & Noble obtaining the remaining leases. These new Burlington stores will help prevent vacant anchor space when Bed Bath & Beyond closes all its stores by June 2024 and ensure consumer traffic to these existing multi-tenant retail locations doesn’t decline.
Ross Dress For Less
Finally, Ross Dress For Less will open 90 new locations across the U.S. in 2024, including 75 Ross stores and 15 dd's DISCOUNTS stores. These openings could help stimulate local economies through job creation and increased footfall for nearby tenants and may boost future development in the area.
Prior to this recent announcement, Ross had just opened stores in New York and Michigan — both new markets for the retailer. Meanwhile, dd's growth focuses on California, Florida, and Texas.
Capitalizing on Multi-Tenant Retail Expansion
Investors can benefit from new store openings in multi-tenant retail centers, as the addition of big-name anchors often results in increased consumer traffic in an area, leads to the creation of new jobs, and positively impacts local economies. In turn, this helps drive demand for additional commercial real estate development.
While these five featured retailers will add more than 650 combined new stores, there are many more retail tenants who are in growth mode. Stay up to date on all the latest announcements with Northmarq’s quarterly report, The Top 100: Tenant Expansion Trends and connect with us at this year’s ICSC Las Vegas!
