Retailers realize the profit is in the store and embrace in-store fulfillment to lower customer acquisition costs.

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TOO GOOD TO IGNORE

suburban open-air shopping CENTERS ARE the darling of cre

TOO GOOD
TO IGNORE

suburban open-air shopping CENTERS
ARE the darling of cre

open-air retail is winning
for savvy investors

For the first time in over two decades, the four most important metrics for retail real estate are growing and blowing past their all-time highs: Traffic, Tenant Sales, Rent, and Occupancy.

Consumers and the Retailers that serve them are uniting in a common place: The Open-Air Suburban Shopping Center.

DLC’s portfolio puts an exclamation point on the fact that open-air retail is the strongest real estate asset class to invest in. The volume of leasing deals we have done, the mix of co-tenancy we’ve developed, the returns on our acquisitions, dispositions, and refinancings – they all point to what we’ve been saying for years – the profit is in the store.

READ ON. The story is too good to ignore.

RETAIL REAL ESTATE IS THRIVING.

THE STORE IS WHERE THE PROFIT IS

Retailers realize the profit is in the store and embrace in-store fulfillment to lower customer acquisition costs.

NO NEW DEVELOPMENT

For the past 15 years, the gross leasable area in open-air retail has net shrunk and continues to shrink due to a variety of factors.

THE EVOLUTION OF TENANT MIX

An explosion of non-retail businesses are gobbling up open-air retail space to get closer to the consumer.

GREATER SALES PER VISIT

Shoppers spend

30-40% more

per visit in-store vs online

84.6%

of total retail sales happen in-store.

Source: United States Census Bureau

OPEN-AIR stores are

vital for retailers

PHYSICAL STORE LOCATIONS

  • Help reduce the cost and frequency of returns
  • Can be used as part of the supply chain
  • Reduce costs related to logistics
  • Provide unmatched convenience for shoppers with the rise of BOPIS and same-day delivery
  • Offer one-on-one customer service experiences
  • Lead to increased sales per customer visit
  • Offer free market research related to customers’ preferences
  • Increase brand awareness

EXISTING RETAIL ASSETS ARE MORE VALUABLE THAN EVER

If America was once over-stored we aren’t anymore.

The increase in construction costs combined with the decrease in retail space deliveries has resulted in an increase in competition for space among tenants.

And with the need for more stores, comes the need for more space.

Driving speed of deals and favorable landlord pricing.

HISTORIC LOW AVAILABILITY

Retail space absorPtion, and availability (Occupancy)

What is available moves fast

the Average time to lease retail vacant space is at an all-time low

DLC SNAPSHOT – In 2023, DLC lease renewals for spaces 10k SF+ were 98%

Retailers are investing in open air stores

With escalating construction costs and limited availability, retailers are investing heavily in existing stores. Retailers are leveraging technology, improving shopping flow, enhancing efficiency and updating aesthetics to elevate the customers in-store experience.

MALL RETAILERS 

FLOCK TO OPEN AIR

Traditional mall brands are lining up for spaces and see their future at neighborhood shopping centers that are more efficient, cost-effective, and tailored to their customer.

DLC SNAPSHOT – DLC relocated Harbor Freight Tools, Ulta, Bath & Body Works, Old Navy, and Buckle from the enclosed mall directly across the street into the preferred open-air shopping center location

deal explosion

Non-traditional retail can’t move fast enough to devour spaces at open-air shopping centers. Unique co-tenancy and competition drive the investment win.

DLC SNAPSHOT2021-2023: DLC added 214 new-to-portfolio tenants, an 18% increase from 2017-2019

openings exceed CLOSINGS FOR THE 3RD CONSECUTIVE YEAR

Aldi plans to add 800 stores nationwide by the end of 2028.

Five Below has set a goal of tripling its store count to more than 3,500 locations by 2030.

DG plans to open 800 new stores and conduct 1,500 remodels and 85 relocations in fiscal year 2024.

Where is store growth coming from?

VALUE RETAIL

Value retail growth is happening in suburbs and non-major markets.

SUBURBAN MIGRATION

Businesses migrate to suburban open-air shopping centers to get closer to consumer.

NON-MAJOR MARKETS

Markets outside the top 25 MSA’s are an attractive destination for retailers.

WHERE IS STORE GROWTH COMING FROM?

VALUE RETAIL

Value retail growth is happening in suburbs and non-major markets.

SUBURBAN MIGRATION

Businesses migrate to suburban open-air shopping centers to get closer to consumer.

NON-MAJOR MARKETS

Markets outside the top 25 MSA’s are an attractive destination for retailers.

value is driving retail growth

year-over-year change in quarterly visits to off-price value retailers and to overall retail nationwide

DLC SNAPSHOT – Greater than 50% of DLC’s Tenants are value retailers.

Retailers finding success outside of non-major markets

year-over-year change in annual visits across select chains (2023 vs. 2022)

DEMOGRAPHICS FAVOR THE SUBURBS

average Annual population growth

DLC SNAPSHOTSuburban shopping centers account for 92% of DLC’s portfolio.

DLC BEATS THE MARKET

Same-store NOI growth 2023 vs. competing open-air REITs

How do we do it?

Opportunistic Retail Market

Focused Investment Thesis

Best-in-Class Team

 

Same-store NOI growth 2023 vs. competing open-air REITs

OUR PARTNERS SAY IT BEST

Your wins won't wait. Get in touch with our team today.

Jonathan

Jonathan Wigser

Executive Vice President and Chief Investment Officer
Adam Greenberg

Adam Greenberg

Senior Vice President of Leasing
Aaron Wu P

Aaron Wu

Senior Vice President of Acquisitions

Read EVEN MORE data-driven results from our partNers

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