Piggyback on anchor tenant retail due diligence
The guest argued that retail real estate developers can de-risk site selection by leveraging the extensive demographic and traffic research of major anchor tenants.
The argument
McNellis noted that when a major national tenant like Walmart decides to locate at a specific intersection, it serves as a reliable validation of the site's viability. This allows smaller developers to rely on the anchor's institutional due diligence rather than conducting exhaustive independent studies.
The thesis, stress-tested
✓ What validates it
- ✓Anchor tenant signing a long-term lease at a target development site
- ✓High traffic counts matching the anchor's historical success metrics
▸ Risks discussed
- ▸Anchor tenants may negotiate highly favorable lease terms that limit developer profitability
- ▸Co-locating near an anchor can expose the developer to vacancy risk if the anchor closes
Hear it yourself
"He's also the author of Making It in Real Estate, Thriving as a Developer. John, welcome to the show. Thank you, Jonathan. A pleasure to be with you today. Yeah. It's good to talk to you. We've got the two formations of John and two former lawyers, still lawyers. Right? We we still count ourselves as lawyers. Right? Do you? Yeah. Yeah. I was called as a witness once in a trial and they asked me if if I was a lawyer. And I said, well, it's kinda like I was a Catholic, you know, when I was a kid. You you can't shake it. Yeah. I always used to joke with people. This will go to the real estate end too."
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