Anchor Tenant | Propertylogy

Anchor Tenant

By on August 7, 2018

Anchor tenants are major departmental stores or supermarkets that have set up shop in shopping malls so as to attract human traffic to the mall.

Sometimes also referred to as key tenants or magnet stores, these retailers often take up at least 10,000 square feet of retail space.

Their presence is an important element in generating business for smaller retail stores who survive from the traffic that anchor tenants generate.

For example, a snack outlet might be located near the exit of a supermarket so as to cash in on exiting customers who feel like having a bite.

In this case, the supermarket is the anchor tenant and the snack bar is a satellite store.

Because of the role they play in a shopping center’s success, anchor tenants usually have a lot of negotiating power over their landlords.

And they use that bargaining power to obtain very attractive terms on the lease.

Sometimes even demanding their own approval for any satellite stores erected around them.

Even though landlords are traditionally the party who have leverage over tenants, they understand that attractive new anchor tenants can be a tough job.

This is because a new tenant will have to spent thousand of dollars just to set up shop. And seeing the exit of a previous tenant can make a prospective new tenant think twice before going in.

Moreover, a month or two of having no anchor stores in a mall can be disastrous to all retailers in the mall.

That can be an even bigger problem for the landlord.


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