Single Tenant Retail 1Q 2014
As the commercial real estate market climbs out of the Great Recession, single tenant retail new construction activity has led the market. The demand by retailers for smaller, freestanding stores has been fueled by shifts in demographics, shopping patterns and the impact of internet sales. Discount stores have made a major push at the expense of more traditional retailers. These freestanding, smaller, long term leased properties have been a preferred investment vehicle for investors, particularly 1031 buyers.
The headlines have been filled with Staples and Radio Shack combined closings of 1,325 stores, but new store openings, in 2013, totaled 10,500 stores compared with the total closure of 2,600 stores, according to Fact Set research. Leading the growth in new store openings has been the dollar store concept of Dollar General, Family Dollar and Dollar Tree. Combined, they've opened over 2,000 new stores in each of the past three years, according to researchers at Cassidy Turley. Dollar General and Family Dollar target sites along primarily arteries near low income transit routes.
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