TOO GOOD
TO IGNORE
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
- 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.
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
walmartgolocal.com – November 2023.; Omnichannel Retail – Using the Physical Store Footprint as a Competitive Advantage
more than 50%
of Walmart’s online orders are fulfilled from stores.
And with the need for more stores, comes the need for more space.
Driving speed of deals and favorable landlord pricing.
EXISTING
RETAIL ASSETS ARE
MORE VALUABLE
Than ever
Construction costs increased
30-40% in the
past 3 years
Historic
LOW AVAILABILITY
With absorption robustly positive, and completions at record low, occupancy is at record high.
Retail space absorPtion, and availability (Occupancy)
Quarterly, In Millions of SF, and Occupancy by %
WHAT IS
available
moves
fast
*Based on the average months it takes to sign a lease from when a space becomes available
DEAL EXPLOSION
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.
LIGHTSPEED LEASING
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 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
Retailers are moving to where the people are.
demographics
favor the
suburbs
Suburban Shopping Center: A center who’s zip code falls outside of a major metro area.
AVERAGE ANNUAL POPULATION GROWTH*
Source: U.S. Census Bureau, Bookings Institute. * Cushman and Wakefield calculations using county level classifications from Brookings.
Retailers finding success outside of non-major markets
DLC has signed 127 NEW DEALS at suburban shopping centers in 2023 vs 84 in 2019
Suburban Shopping Center: A center who’s zip code falls outside of a major metro area.
year-over-year change in annual visits across select chains (2023 vs. 2022)
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
Your wins won't wait. Get in touch with our team today.
Jonathan Wisger
Adam Greenberg
Aaron Wu
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